If the Crowding-Out Effect Is Strong, How Will the Potency

question 96

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.

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Definitions:

Trait

A distinct characteristic or attribute of an organism that can be passed from one generation to the next through genetic inheritance.

Selection Phenomenon

The process by which certain traits become more or less common in a population due to differential reproduction of their bearers.

Sickle-Cell Anemia

An inherited blood disorder characterized by the production of abnormal hemoglobin, leading to deformed red blood cells that can cause blockages and severe pain.

Balanced Polymorphism

Maintenance of two or more alleles of a gene at high frequency in a population.