The defining characteristic of equilibrium in the Australian model is that:
A) the economy is operating on its production frontier.
B) the market for nontradables is in equilibrium.
C) the market for tradables is in equilibrium.
D) both the market for nontradables and the market for tradables are in equilibrium.

Question

Quizplus · Accepted Answer

In the Australian model, the equilibrium is achieved when both the markets for nontradables and tradables are in equilibrium. This means that the demand and supply of both goods and services are balanced, leading to a state of economic stability. Therefore, option D is the correct answer. Options A, B, and C are incorrect because they do not capture the essence of the equilibrium in the Australian model.

The Defining Characteristic of Equilibrium in the Australian Model Is