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

where C, Ip, G, NX, and T denote consumption spending, planned investment, government spending, net exports, and taxes respectively. The real interest rate is denoted by r.

a. Calculate the multiplier for this economy. Why is the value of the multiplier usually greater than one?

b. Given the information about the economy above, what would be the impact on autonomous expenditures due to a one-percentage-point increase in the real interest rate (r)?