Which Statement Is True of an Exogenous Variable in an Economic

question 56

Multiple Choice

Which statement is true of an exogenous variable in an economic model?

• A)It has no direct relation to the endogenous variables.
• B)Its value within the model cannot be changed.
• C)It is often a policy variable.
• D)It is explained inside the model.
• E)All of the above.

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Definitions:

Margin Call

A demand by a broker that an investor deposits further cash or securities to cover possible losses.

Initial Margin

The initial margin is the upfront investment required when buying on margin or entering a futures contract, acting as a security deposit for the trade.

Maintenance Margin

The minimum amount of equity an investor must maintain in a margin account after the purchase has been made, to keep the position open.

Interest Rate Swaps

Financial derivatives contracts where two parties exchange interest rate payments on a specified principal amount, typically exchanging fixed for floating rates.