Match the following possible combinations of internal and external imbalance to achieve internal balance in each case and their effect on external balance and choose the correct answer from the options given below
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List – 1 |
List – 2 |
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Case |
Policy for Internal Balance |
Effect on External Balance |
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|
i. |
Unemployment with deficit |
1. |
Expansionary |
Worsens |
|
ii. |
Unemployment with surplus |
2. |
Expansionary |
Improves |
|
iii. |
Inflation with surplus |
3. |
Restrictive |
Worsens |
|
iv. |
Inflation with deficit |
4. |
Restrictive |
Improves |
1
i – 4; ii – 3; iii – 2; iv – 1
2
i – 3; ii – 4; iii – 1; iv – 2
3
i – 2; ii – 1; iii – 4; iv – 3
4
i – 1; ii – 2; iii – 3; iv – 4