A high rate of military spending by the government
A) is beneficial to the economy during a period of full employment.
B) tends to increase investment and consumer goods during a period of full employment.
C) will tend to put the economy into a recession.
D) will tend to reduce the rate of capital investment over a long period of time.

Question

Quizplus · Accepted Answer

High military spending by the government, especially during a period of full employment, can crowd out private investment because the government competes with the private sector for resources, leading to a reduction in capital investment over time.

A High Rate of Military Spending by the Government