Which of the following is an exogenous variable in the dynamic model of aggregate demand and aggregate supply? A) E_t $\pi$_{t + 1}, expected inflation B) r_t, real interest rate C) $\pi$_t, inflation D) $\pi$_t, supply shock

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An exogenous variable is a variable that is not influenced by changes in the model and affects it from outside forces. In this context, a supply shock (_t) is an exogenous variable as it is an external factor that affects the model without being affected by it. The other variables listed (expected inflation, real interest rate, and inflation) are endogenous variables, meaning they are influenced by changes within the model.

Which of the Following Is an Exogenous Variable in the Dynamic