ABSTRACT
In the previous two chapters a simple definition of “equilibrium” was used: markets are in equilibrium if there is neither unsatisfied demand nor unsold supply. In anticipation of the introduction of money into the analysis, a more precise definition is required. For the rest of this book, the following, strictly neoclassical definition will be used:
A market or set of markets is in equilibrium if the agents participating in that (or those) market(s) have no cause to alter their plans of how much they desire to buy and sell.
