The Canadian economy can be characterized by Equation 9.2.
EQUATION 9.2:
C = 500 + 0.5Yd
Taxes = 600
Equilibrium Output = $4,000
-Refer to Equation 9.2. At equilibrium leakages in Canada equal

Question

Quizplus · Accepted Answer

Leakages in the economy are equal to the sum of savings (S), taxes (T), and imports (M). 
In this case, since the equation only gives us the consumption function, we need to calculate leakages separately. 
Savings (S) = Yd – C 
= 4,000 – (500 + 0.5 × 4,000) 
= 4,000 – 2,500 
= 1,500 
Imports (M) = 0.1Y 
= 0.1 × 4,000 
= 400 
Leakages = S + T + M 
= 1,500 + 600 + 400 
= 2,500 
Therefore, at equilibrium, leakages in Canada equal $2,500. None of the given answer choices match this value, but the closest one is C, which is $1,800. This means that there is an error in the question or in the calculation.

The Canadian Economy Can Be Characterized by Equation 9