The Use of 1/MPS Formula as the Size of the Multiplier

Multiple Choice

The use of 1/MPS formula as the size of the multiplier in the economy, overstates the actual size of it because:

A) saving is not the only fraction of the domestic income which is not spent.
B) saving is the only fraction of the domestic income which is not spent.
C) imports and taxes create new income in the economy.
D) imports and not taxes creates new income in the economy.