GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Impact of change in demand in one sector on other sectors is studied by
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Partial equilibrium
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General equilibrium
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Both (a) and (b)
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None of these
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Explanation:
Detailed explanation-1: -Why Is General Equilibrium Important? Often a change in an economic system will have repercussions far beyond the sector in which the change occurs. General equilibrium models are designed to help us understand those repercussions.
Detailed explanation-2: -General equilibrium theory refers to a theory which tries to explain how demand, supply, and price functions in an economy as a whole and not just in a single or specific market. General equilibrium is only in existence when every single products supply equals demand.
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