In a macroeconomic model designed to explain why some countries grow faster than others,which of these variables is likely to be endogenous?
A)investment
B)economic policies
C)geographic size
D)population
E)none of the above

Question

Quizplus · Accepted Answer

Investment is likely to be endogenous because it is influenced by various factors such as economic policies, human capital, and technological advancements, which are all endogenous variables. Economic policies (B) can also be endogenous to some extent, but they can also be exogenous if imposed by external entities like international organizations. Geographic size (C) and population (D) are typically exogenous variables that do not change much over time and are not influenced by the economic system in the short run. Therefore, the best choice for an endogenous variable is A) investment.

In a Macroeconomic Model Designed to Explain Why Some Countries