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Username: Maria

Rating:
Guru Stars

Asked to: Jun Wang

Date Created: 24 Jun 2015
Category 28
Tag Forex
Question What is equilibrium price in economics?
Advice from Guru
Hi Maria,

A condition or state in which economic forces are balanced.

Economic equilibrium can be static or dynamic and may exist in a single market or multiple markets. It can be disrupted by exogenous factors, such as a change in consumer preferences, which can lead to a drop in demand and consequently a condition of oversupply in the market. In this case, a temporary state of disequilibrium will prevail until a new equilibrium price or level is established, at which point the market will revert back to economic equilibrium.

The term 'economic equilibrium' can also be applied to any number of variables, such as the interest rate that allows for the greatest growth of the banking and non-financial sector.

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