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. The potency of expansionary fiscal policy will be reduced, but that of restrictive fiscal policy will be enhanced.
c. The potency of fiscal policy will be unaffected.
d.   It will make fiscal policy less potent.

ANSWER:

d.   It will make fiscal policy less potent.