When there is economy-wide equilibrium,there is a tendency for
A) total output to rise.
B) total output to fall.
C) total output to remain unchanged.
D) prices to fall.
E) prices to rise.

Question

Quizplus · Accepted Answer

In an economy-wide equilibrium, all markets are in balance, and there is no excess demand or supply. As a result, total output is at its optimal level, given the available resources and technology. Since the economy is already producing the maximum amount it can without creating shortages or surpluses, there is no tendency for output to rise or fall. Therefore, the only logical option is C, total output remains unchanged. Prices may still fluctuate, but not necessarily in any particular direction.

When There Is Economy-Wide Equilibrium,there Is a Tendency for