The effect of crowding out and the presence of forward-looking households makes the size of the multiplier

smaller

more volatile

larger

.

This happens because, in the case of crowding out, a government budget deficit pushes the real interest rate

higher

lower

with the result that investment is

reduced

increased

With the presence of forward-looking households, a government budget deficit suggests that future taxes may be

higher

lower

than otherwise, and this depresses present

consumption

saving

which options are correct?