government expenditure towards infrastructure increases and is deficit financed, then: a. The debt decreases, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be large. b. The possible crowding-out effect is relatively high, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be low. c. The possible crowding-out effect is relatively low, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be large. d. The deficit decreases, hence the net-effect of the program on productivity

MACROECONOMICS FOR TODAY
10th Edition
ISBN:9781337613057
Author:Tucker
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Chapter13: Federal Deficits, Surpluses, And The National Debt
Section: Chapter Questions
Problem 13SQ
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If government expenditure towards infrastructure increases and is deficit financed, then:

a. The debt decreases, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be large.
b. The possible crowding-out effect is relatively high, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be low.
c. The possible crowding-out effect is relatively low, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be large.
d. The deficit decreases, hence the net-effect of the program on productivity and in turn output (i.e. GDP) may be large.
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