What is general equilibrium?
What will be an ideal response?
General equilibrium is the condition that exists when all markets in an economy are in simultaneous equilibrium.
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Which of the following statements is correct?
a. In the new classical view, the money wage is assumed to adjust quickly to clear the labor market whereas in the Keynesian view, the money wage is sticky in a downward direction. b. In the new classical view, the money wage is sticky in a downward direction whereas the money wage is assumed to adjust quickly to clear the labor market in the Keynesian view. c. In both the new classical and the Keynesian views, the money wage is assumed to adjust quickly to clear the labor market. d. In both the new classical and the Keynesian views, the money wage is sticky in a downward direction.
At a perfectly competitive firm's short-run break-even price
A) P = ATC. B) TR is more than TC. C) the average cost is below the total revenue line. D) P > AVC, but P < AFC.