In a certain economy, the components of planned spending are given by: C = 500 + 0.8(Y - T ) - 300rI P= 200 - 400rG = 200NX = 10T = 150 Given the information about the economy above, what would be the impact on autonomous expenditures of a one-percentage-point increase in the real interest rate (r )?
A. Autonomous expenditures would decrease by 35 units.
B. Autonomous expenditures would decrease by 700 units.
C. Autonomous expenditures would decrease by 7 units.
D. Autonomous expenditures would increase by 35 units.
Answer: C
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