Choose the statement that best describes how endogenous variables differ from exogenous variables.
A)An endogenous variable is explained within the theory,while an exogenous variable influences the endogenous variables but is determined outside the theory.
B)An endogenous variable is a flow,while an exogenous variable is a stock.
C)An endogenous variable is explained outside the theory and influences an exogenous variable while an exogenous variable is explained within the theory.
D)An exogenous variable is a function of the endogenous variable,and both are flow variables.
E)An endogenous variable is a function of the exogenous variable,and both are stock variables.

Question

Quizplus · Accepted Answer

Endogenous variables are those that are explained within the theory and are influenced by other endogenous variables in the model. Exogenous variables, on the other hand, are determined outside the theory and influence the endogenous variables but are not explained by them. Choice A correctly describes this distinction between endogenous and exogenous variables.

Choose the Statement That Best Describes How Endogenous Variables Differ