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The name 'computable general equilibrium (CGE) model' indicates the main features of this type of model. Equilibrium is a common economic term which means a system reaches a relatively stable state. For example, fluctuations of demand for and supply of apples will cause a change in apple prices: when demand for apples is greater than the supply of apples, apple prices will go up, and vice versa. However, over time, the demand and supply will reach a balance and thus the price of apples will be relatively stable. |
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