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Homework answers / question archive / A model of all markets in the economy and not just a single market is called a(n): a
A model of all markets in the economy and not just a single market is called a(n):
a. regression model.
b. butterfly-effect model.
c. general equilibrium model.
d. classical model.
The answer is c).
A general equilibrium exists when prices adjust such that quantity demanded equal to quantity supplied in multiple markets simultaneously. Hence, a model of all markets in the economy is called a general equilibrium model, which allows changes to one market influence also outcomes in other markets.
