The Simple Multiplier 1/MPS

Multiple Choice

The simple multiplier 1/MPS

A) understates the actual multiplier because it includes leakages in domestic spending from the purchase of imports or the paying of taxes.
B) understates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes.
C) overstates the actual multiplier because it includes leakages in domestic spending from the purchase of imports or the paying of taxes.
D) overstates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes.