Second- best solutions recognise that the economy is not in general equilibrium and seek to solve a problem without creating more problems elsewhere in the economy.

Question

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Second-best solutions acknowledge that achieving a perfect general equilibrium in the economy is often unrealistic. Instead, they aim to address specific issues in a way that minimizes negative impacts on other parts of the economy, recognizing the interconnectedness and potential for unintended consequences.

Second- Best Solutions Recognise That the Economy Is Not in General