Economic model building begins with the construction of greatly oversimplified "benchmark" models,which are brought closer to reality by gradually removing the simplifying assumptions.In this process,more and more ________ variables become ________.
A)short-run,long-run
B)exogenous,endogenous
C)long-run,short-run
D)endogenous,exogenous
E)nominal,real

Question

Quizplus · Accepted Answer

The process of gradually removing simplifying assumptions involves bringing variables that were initial exogenous closer to reality by making them endogenous variables. Therefore, option B is the correct choice.

Economic Model Building Begins with the Construction of Greatly Oversimplified