A general-equilibrium model is a model in which
A)all key macroeconomic variables are endogenous.
B)more than one key macroeconomic variable is exogenous.
C)only one macroeconomic variable is exogenous.
D)none of the key macroeconomic variables are endogenous.

Question

Quizplus · Accepted Answer

A general-equilibrium model is a model in which all key macroeconomic variables are endogenous, meaning that they are determined within the model itself and are not assumed to be exogenously determined. This includes variables such as prices, quantities, and production levels, which are all determined simultaneously through the interactions between different sectors and agents in the economy.

A General-Equilibrium Model Is a Model in Which