In an economy, the marginal propensity to consume of unemployed people is greater than that of taxpayers. The government raises expenditure on unemployment benefits by $10 m and increases taxation by $10 million. How will aggregate demand be affected?
- AIt will be unchanged.
- BIt will increase by less than $10 million.
- CIt will increase by $10 million.
- DIt will decrease by $10 million.