In the equation Y = C + I + G,
A)only I is an exogenous variable determined by factors outside the model.
B)only G is an exogenous variable determined by factors outside the model.
C)C is an endogenous variable determined by factors inside the model.
D)I and G are exogenous variables determined by factors outside the model.
E)A,b,and c

Question

Quizplus · Accepted Answer

In the equation Y = C + I + G, C is determined by factors inside the model, such as disposable income and consumption behavior. I and G are exogenous variables determined by factors outside the model, such as government policies and investment decisions. Therefore, only C is an endogenous variable.

In the Equation Y = C + I + G