Option 2: (A) - (IV), (B) - (I), (C) - (II), (D) - (III) -> Let's match each term correctly:
(A) Inflationary gap occurs when aggregate demand exceeds aggregate supply at full employment level. At this point, the economy operates at full capacity with no unemployment or underemployment, matching with (IV).
(B) Decline in exports reduces the net exports component (X-M) of aggregate demand (AD = C + I + G + X - M). This leads to a deficiency in aggregate demand, matching with (I).
(C) Cash reserve ratio (CRR) is a monetary policy instrument used by central banks to control money supply and credit creation in the economy. It helps correct disequilibrium between AD and AS, matching with (II).
(D) Fiscal policy involves government decisions on taxation and public expenditure. It is formulated and pursued by the government of the country, matching with (III).
Therefore, the correct matching is A-IV, B-I, C-II, D-III. -> correct