Which of the following is an exogenous variable in the dynamic model of aggregate demand and aggregate supply? A)E_tπ_{t + 1}, expected inflation B)r_t, the real interest rate C)π_t, inflation D)υ_t, supply shock

Question

Quizplus · Accepted Answer

Supply shock (υ_t) is considered an exogenous variable because it originates outside the economic model and is not determined by the model's internal mechanisms.

Which of the Following Is an Exogenous Variable in the Dynamic