Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions :
Scenario: Fiscal Policy
Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the arc. Potential output is 600 billion arcs.
-(Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. The government spending multiplier is:

A) 5.
B) 0.75.
C) 4.
D) 3.