ABSTRACT
This chapter gives one possible answer to this problem of homogeneity by dropping the customary equilibrium conditions, and introducing instead another set of conditions, which include the customary equilibrium conditions as a special case and it put forward the general quasi-equilibrium theory. It also provides a certain possibility of investigating the extent to which one-commodity, one-factor analysis of inflation may be broadened to a more general applicability, when several goods are taken into consideration. The interpretation of the concept of excess demand has some significance for the inconsistency. In order to prove the result an ordinary Walras system of a simple character is first considered, and the proof is demonstrated by showing that the inflationary gap interpretation of the concept of excess demand must lead to the result that the so-called Walras's Law cannot be taken as an identity.
