What are the two types of variables in economic models? (1.5 Marks)Question 10Select one:a.Behavioral and technicalb.Endogenous and exogenousc.Linear and nonlineard.Explanatory and dependent
Question
What are the two types of variables in economic models? (1.5 Marks)Question 10Select one:a.Behavioral and technicalb.Endogenous and exogenousc.Linear and nonlineard.Explanatory and dependent
Solution
The two types of variables in economic models are endogenous and exogenous.
Endogenous variables are those that are determined within the model. They are the output of the model and their values are influenced by other variables in the model.
Exogenous variables, on the other hand, are determined outside the model. They are inputs to the model and their values are taken as given, not influenced by other variables in the model.
So, the correct answer is b. Endogenous and exogenous.
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