In a certain economy, the components of planned spending are given by:

C= 500 + 0.8(Y-T) - 300r

Ip= 200 - 400r

G= 200

NX= 10

T= 150

Given the information about the economy above, what would be the impact on induced expenditures of a one-percentage-point increase in the real interest rate?

Select one:

a. Induced expenditures would increase by 35 units.

b. Induced expenditures would not change.

c. Induced expenditures would decrease by 35 units.

d. Induced expenditures would decrease by 7 units.