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

question 39

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 contractionary will be reduced.

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Definitions:

Free Association

A psychoanalytic technique in which a patient says whatever comes to mind without filtering thoughts, aimed at uncovering unconscious thoughts and feelings.

Group Setting

A social context or environment where individuals gather together, often for a specific purpose or activity, influencing interactions and behavior within the group.

Drugs

Substances that alter the physiological or psychological state of an individual, which can include medications, narcotics, and psychoactive compounds.

Repressed

Involuntarily held out of conscious awareness, used particularly to describe memories or impulses that are hidden due to being considered unacceptable.