Define or Explain the following concepts 3) General equilibrium

Define or Explain the following concepts

3) General equilibrium

ANSWER:

General equilibrium is a method to study equilibrium in different markets simultaneously. It is the method of studying macroeconomics. According to Stigler, the theory of general equilibrium is the theory of inter-relationship of all units of the economy. Hence, this method assumes that all macroeconomic variables are interdependent.

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