Choose the Statement That Best Describes How Endogenous Variables Differ

question 45

Multiple Choice

Choose the statement that best describes how endogenous variables differ from exogenous variables.

• A)An endogenous variable is a function of the exogenous variable, and both are stock variables.
• B)An endogenous variable is explained outside the theory and influences an exogenous variable while an exogenous variable is explained within the theory.
• C)An endogenous variable is explained within the theory, while an exogenous variable influences the endogenous variables but is determined outside the theory.
• D)An exogenous variable is a function of the endogenous variable, and both are flow variables.
• E)An endogenous variable is a flow, while an exogenous variable is a stock.

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Definitions:

Endowment Policy

A life insurance contract designed to pay a lump sum after a specific term or on death.

Life Policy

An agreement that awards a specified sum to a named beneficiary when the person covered by the policy dies.

Maximum Available

The highest amount or quantity that can be used, offered, or allocated from a particular resource or within a specific framework.

Straight-life Policy

A type of life insurance policy that provides coverage for the insured's entire lifetime, with fixed annual premiums and a guaranteed death benefit.