Multiple Choice
If the crowding-out effect is strong, how will the potency of discretionary fiscal policy be affected?
A) It will make fiscal policy more potent.
B) It will make fiscal policy less potent.
C) The potency of fiscal policy will be unaffected.
D) The potency of expansionary fiscal policy will be reduced, but that of restrictive fiscal policy will be enhanced.
Correct Answer:
Verified
Correct Answer:
Verified
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