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
Answer: A) by the initial change in consumption arising from the change in transfer payment × the spending multiplier.
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