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:

Acceptable Price

The price at which a consumer is willing to purchase a product or service, often considered fair by both the buyer and the seller.

Willing To Pay

The maximum amount an individual or entity is ready to spend to acquire a good or service or to avoid something undesirable.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Economically Desirable

Characteristics or actions that are considered beneficial for the economy, potentially enhancing efficiency or growth.