"Expansionary fiscal policy is always 100 percent effective when the short-run aggregate supply curve is horizontal." Is this statement true?

Question

Quizplus · Accepted Answer

When the short-run aggregate supply curve is horizontal, expansionary fiscal policy can lead to crowding out, where increased government spending or decreased taxes raise interest rates, which in turn may reduce investment spending by private entities.

"Expansionary Fiscal Policy Is Always 100 Percent Effective When the Short-Run