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An Increase in Government Transfer Payments Will Shift the Aggregate

Question 95

Multiple Choice

An increase in government transfer payments will shift the aggregate demand curve to the right


A) by the initial change in consumption arising from the change in transfer payment × the spending multiplier.
B) by the initial change in income arising from the change in transfer payment × the spending multiplier.
C) by the change in transfer payments × times the spending multiplier.
D) by the change in transfer payments × times the marginal propensity to consume.

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