According to Professor Baotai Wang who examined the crowding out phenomenon in Canada between 1961-2000, as discussed in the Case in Point, expenditures for protection of persons and property
A) involve no crowding out.
B) may involve some crowding out, but they also stimulated private investment by firms winning government contracts for defense purchases.
C) stimulate aggregate demand and aggregate supply.
D) may involve some crowding out, which is offset by the strong supply-side effects they generate.
Ans: B) may involve some crowding out, but they also stimulated private investment by firms winning government contracts for defense purchases.
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