In a macroeconomic model, equilibrium is when
A) the government has achieved an efficient allocation of resources.
B) the actions of consumers and firms are consistent.
C) everyone in the economy is happy.
D) nothing is changing.

Question

Quizplus · Accepted Answer

In a macroeconomic model, equilibrium is achieved when the actions of consumers and firms are consistent, meaning that the amount of goods and services demanded equals the amount of goods and services supplied. This leads to the efficient use of resources and an optimal level of output. The government's role is to create an environment that allows for this equilibrium to be achieved but it does not necessarily mean that they have achieved an efficient allocation of resources. Happiness is subjective and not measurable in an economic context. While things may be changing within the economy, equilibrium is still achieved as long as the actions of consumers and firms remain consistent.

In a Macroeconomic Model, Equilibrium Is When