In macroeconomics, equilibrium is defined as the point at which:

Question

Quizplus · Accepted Answer

Equilibrium in macroeconomics refers to the point at which the plans of households, firms, and government align with the actual state of the economy. This means that there are no unintended imbalances in the economy, such as excess demand or excess supply in the goods and labor markets. Equilibrium does not necessarily imply maximal GDP or zero unemployment, as these can occur even when the economy is not in equilibrium. Similarly, equilibrium can occur even when there is inflation or some level of unemployment, as long as these are consistent with the economy's underlying equilibrium conditions. Therefore, the correct answer is (C) people's plans match the reality.

In Macroeconomics, Equilibrium Is Defined as the Point at Which