The Complete General Equilibrium Model
The complete general equilibrium model comprises the equilibrium interrelationships among the four sectors, namely, labour market, product market, monetary sector and the expenditure sector. These interrelationships mean that in a state of general economic equilibrium, an equilibrium in any of these sectors will imply equilibrium in the other sectors as well. On the other hand, a disequilibrium in any one of the sectors will result in disequilibrium in all other sectors as well. Full-employment equilibrium will necessitate equilibrium in all the sectors simultaneously under conditions of optimal utilization of factors and resources of production.
KeywordsPrice Level Aggregate Demand General Equilibrium Model Aggregate Supply Aggregate Production Function
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