Consider the following statements regarding economic recession:
- High-interest rates are a cause of recession because they limit liquidity, or the amount of money available to invest.
- An increase in public expenditure rises GDP by the same amount.
- Public expenditure gives rise to positive externalities to the economy and society as a whole.
1
1 and 2 only
2
2 and 3 only
3
1 and 3 only
4
1,2 and 3