If a macroeconomist studying the causes of unemployment suspects that changes in technology might play a role,then this macroeconomist is at which step in the process of developing an economic model?
A)Identify the exogenous variables.
B)Identify the endogenous variables.
C)Compare the model with the data.
D)Conduct prediction and policy analysis.
E)Develop a model.

Question

Quizplus · Accepted Answer

Identifying the exogenous variables is the step in developing an economic model where a macroeconomist would consider changes in technology as a potential cause of unemployment. Exogenous variables are those external factors that the model takes as given, which could influence the endogenous variables (outcomes) the economist is trying to understand.

If a Macroeconomist Studying the Causes of Unemployment Suspects That