In an economic model:
A)endogenous variables feed into a model to affect exogenous variable.
B)exogenous variables feed into a model to affect endogenous variables.
C)exogenous and endogenous variables feed into the model.
D)none of the above.

Question

Quizplus · Accepted Answer

In an economic model, exogenous variables are considered to be outside factors that may affect the model, while endogenous variables are the variables that the model seeks to explain. Therefore, it makes sense for the exogenous variables to be the ones that feed into the model and affect the endogenous variables.

In an Economic Model