If the crowding-out effect is strong, how will the potency of discretionary fiscal policy be affected?

Question

Quizplus · Accepted Answer

The crowding-out effect occurs when increased government spending leads to an increase in interest rates, which reduces private investment and offsets the stimulative effects of fiscal policy. If the crowding-out effect is strong, then fiscal policy will be less potent because the offsetting effect of higher interest rates will be larger.

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