Which of the Following Statements Is FALSE

Multiple Choice

Which of the following statements is FALSE?

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