Which of the Following Statements Is Incorrect

Multiple Choice

Which of the following statements is incorrect?

A) Taxes and transfer payments affect aggregate demand by changing disposable income.
B) An increase in disposable income leads to a decrease in aggregate demand.
C) Fiscal policy is the attempt to influence the economy using taxes, transfer payments, and government expenditures.
D) Government expenditures affect aggregate demand directly because government expenditures are a component of aggregate demand.