According to Professor Baotai Wang who examined the crowding out phenomenon in Canada between 1961-2000, as discussed in the Case in Point, which of the following categories of government expenditures are most likely to lead to crowding out?

Question

Quizplus · Accepted Answer

Professor Baotai Wang found that expenditures on infrastructure and capital are most likely to lead to crowding out because they tend to compete with investment from private sector. This competition can lead to higher interest rates, which can in turn reduce private investment and lead to a decrease in overall economic growth.

According to Professor Baotai Wang Who Examined the Crowding Out