The experience of the Canadian economy during World War II confirms the prediction that a dramatic increase in government spending is likely to

Question

Quizplus · Accepted Answer

The experience of the Canadian economy during World War II was characterized by a substantial increase in government spending, which led to an increase in real GDP due to increased economic activity, such as military production. However, this increase in government spending also caused a decrease in consumption, as resources were diverted from the production of consumer goods to military production. Therefore, option B is the correct answer as it reflects the situation in the Canadian economy during World War II.

The Experience of the Canadian Economy During World War II