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Match policy path: 1. Expand: p. Cut rate 2. Tight: q. Rate hike 3. Goal: r. Stability

A1-p, 2-q, 3-r
B1-p, 2-r, 3-q
C1-q, 2-p, 3-r
D1-r, 2-p, 3-q
Answer & Solution
Correct answer: A. 1-p, 2-q, 3-r
Expansionary policy decreases interest rates to encourage borrowing, while contractionary policy increases rates.
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