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

question 13

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 only contractionary fiscal policy will be reduced .

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Definitions:

Pharynx

A muscular tube that connects the mouth and nasal cavity to the esophagus and larynx, serving both respiratory and digestive functions in vertebrates.

Throat Region

The anterior part of the neck, through which food and air pass to the esophagus and trachea respectively.

Bronchi

The major air passages of the lungs that diverge from the windpipe, facilitating the transport of air in and out of the lungs.

Alveoli

Tiny air sacs within the lungs where the exchange of oxygen and carbon dioxide occurs.