In the context of new classical models, Walrasian general equilibrium means that _____.

a. goods are always traded at equilibrium prices in all markets

b. voluntary unemployment cannot occur

c. no trade-off between inflation and unemployment is possible

d. money is always neutral

e. none of the above

The correct answer is E (None of the above).

Walrasian general equilibrium is a concept that tries to explain economics as a whole but not based on specific markets. The theory indicates that both supply and demand may not reach equilibrium, but they tend to bend towards equilibrium. Moreover, the supply and demand levels in different markets may determine the equilibrium level and create the equilibrium price of products in the markets. The theory has been considered different from other equilibrium theories since they tend to analyze specific market's equilibrium, but the Walrasian general equilibrium analyzes the entire economy.