The Italian economy can be characterized by Equation 9.1.
EQUATION 9.1:
C = 300 + 0.8Yd
G = 400
T = 200
I = 200
-Refer to Equation 9.1. At the equilibrium level of output in Italy, leakages equal

Question

Quizplus · Accepted Answer

Leakages in the economy are equal to the sum of savings, taxes, and imports (S + T + M). In this equation, the only leakage is T (taxes) which equals $200. Therefore, at equilibrium, leakages equal $200. Option A is the only choice that reflects this answer.

The Italian Economy Can Be Characterized by Equation 9