Which of the following pairs are correctly matched? 1. I. Increase in foreign exchange reserves - Monetary expansion 2. II. Low import growth rate in India - Recession in Indian Industry 3. III. Euro issues - Shares held by Indian companies in European countries 4. IV. Portfolio investment - Foreign institutional investors Select the correct answer by using the following codes:

1. Pair I: Increase in foreign exchange reserves - Monetary expansion. This is generally correct. When the RBI purchases foreign exchange, it releases equivalent rupees into the banking system, increasing the monetary base and leading to monetary expansion (unless sterilized). 2. Pair II: Low import growth rate in India - Recession in Indian Industry. This is a plausible correlation. A recession often leads to reduced demand for both domestic and imported goods, including industrial inputs and consumer goods. Thus, a low import growth rate can be an indicator or consequence of a recession in the Indian industry. 3. Pair III: Euro issues - Shares held by Indian companies in European countries. This is incorrect. Euro issues refer to financial instruments (like bonds or equities) issued by a company (Indian or foreign) in a currency other than the currency of the country where it is issued (often in the Eurodollar or Euroyen market, historically). It does not mean shares held by Indian companies in European countries. 4. Pair IV: Portfolio investment - Foreign institutional investors (FII). This is correct. FIIs primarily engage in portfolio investment, which involves investing in financial assets like stocks and bonds, rather than foreign direct investment (FDI), which involves acquiring substantial control or ownership in a foreign enterprise. 5. Since pairs I, II, and IV are correctly matched (or represent plausible economic relationships), option (A) is the correct answer.