If you were building a macroeconomic model that explores the effect of the aging population on the needed expenditure for social security and health care,the exogenous variable(s)would be the
A) aging population.
B) needed expenditure on social security.
C) needed expenditure on health care.
D) needed expenditure on both social security and health care.

Question

Quizplus · Accepted Answer

The aging population is the exogenous variable in this model, as it is outside the control of the government or other actors in the economy. The needed expenditure on social security and health care are endogenous variables that will be affected by changes in the aging population.

If You Were Building a Macroeconomic Model That Explores the Effect