A partial-equilibrium model is a model in which
A)all key macroeconomic variables are endogenous.
B)some key macroeconomic variables are exogenous.
C)all key macroeconomic variables are discrete random variables.
D)none of the key macroeconomic variables are endogenous.

Question

Quizplus · Accepted Answer

In a partial-equilibrium model, some key macroeconomic variables are considered exogenous and their values are held constant while the model analyzes the effects of changes in other variables. This is in contrast to a general-equilibrium model where all key variables are endogenous and interact with each other.

A Partial-Equilibrium Model Is a Model in Which