Jack has an MPC of 0.82 and Jill has an MPC of 0.78. Ceteris paribus, if the government transfers income from people who behave like Jack to people who behave like Jill,

A. Aggregate demand will increase.
B. Aggregate demand will decrease.
C. It is not possible to predict what will happen to aggregate demand.
D. Aggregate demand will remain the same.


Answer: B

Economics

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