In the context of simultaneous equations modelling, which of the following statements is true concerning an exogenous variable?
A) The values of exogenous variables are determined within the system
B) The exogenous variables are assumed to be fixed in repeated samples
C) Reduced form equations will not contain any exogenous variables on the RHS
D) Reduced form equations will contain only exogenous variables on the LHS

Question

Quizplus · Accepted Answer

Exogenous variables are considered to be external to the model and their values are not determined by the system of equations itself. Instead, they are assumed to be fixed or given from outside the model, which means their values do not change within the context of the model's equations in repeated samples.

In the Context of Simultaneous Equations Modelling, Which of the Following