Equilibrium in the economy means
A)unemployment is zero.
B)quantities demanded and supplied are equal in all markets.
C)prices are not changing over time.
D)tax revenues equal government spending, so the government has no budget deficit.

Question

Quizplus · Accepted Answer

Equilibrium in the economy means that the quantities demanded by consumers and the quantities supplied by producers are equal in all markets. This occurs at the market-clearing price, where there is no excess supply or demand. While a zero unemployment rate and stable prices may be indicators of a healthy economy, they do not necessarily indicate equilibrium. A balanced budget, as described in answer choice D, is a goal of fiscal policy, but does not relate to the concept of equilibrium in the economy.

Equilibrium in the Economy Means