What is general equilibrium? What will be an ideal ...

[imanialler]

What is general equilibrium?
 
  What will be an ideal response?

Question 2

China's prosperity brings income gap The Asian Development Bank ADB reports that China has the largest gap between the rich and the poor in Asia.
 
  Ifzal Ali, the ADB's chief economist, claims it is not that the rich are getting richer and the poor are getting poorer, but that the rich are getting richer faster than the poor. Source: Financial Times, August 9, 2007 Explain how the distribution of personal income in China can be getting more unequal even though the poorest 20 percent are getting richer.

[hramirez205]

Answer to Question 1

General equilibrium is the condition that exists when all markets in an economy are in simultaneous equilibrium.

Answer to Question 2

The distribution of income in China can be getting more unequal even when the poorest 20 percent are getting richer because the richest 20 percent are getting richer even faster. Because the rich are getting richer fast-er, the fraction of the nation's total income received by the poorest 20 percent falls, which makes the personal distribution of income more un-equal.

[imanialler]

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