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general equilibrium


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The approach in economics of analysing simultaneous equilibrium on all markets in an economy. For general equilibrium all markets must be in equilibrium, and no change of actions in any market must reward any agent. General equilibrium is contrasted with the partial equilibrium approach, in which some part of the economy is considered, taking as given what is happening in other markets. See also Arrow–Debreu economy.

Subjects: Economics.


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