When Taking into Account Foreign-Income Repercussions, the Spending Multiplier Is

Multiple Choice

When taking into account foreign-income repercussions, the spending multiplier is:

A) smaller because an increase in domestic imports causes current account deficit.
B) larger because an increase in domestic imports causes foreign income to rise and thus boosts domestic exports.
C) smaller because an increase in domestic imports lowers the growth in the domestic exports.
D) larger because an increase in domestic imports causes a surplus in the official settlements balance.