Suppose an economy suffers a real shock that lowers the economy's long-run potential growth rate. Will fiscal policy be effective in taking the economy back to its original point? How would the existence of crowding out affect your answer? Illustrate your answer with the use of a diagram.

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The Answer of Suppose an economy suffers a real shock that lowers the economy's long-run potential growth rate. Will fiscal policy be effective in taking the economy back to its original point? How would the existence of crowding out affect your answer? Illustrate your answer with the use of a diagram.

Suppose an Economy Suffers a Real Shock That Lowers the Economy's