In the development of the IS curve,one variable that turns from exogenous to endogenous is
A)the interest rate.
B)the price level.
C)consumption.
D)saving.
E)investment.

Question

Quizplus · Accepted Answer

In the development of the IS curve, investment turns from exogenous to endogenous because it depends on many factors such as interest rates, expectations of future profitability, and business confidence. As such, changes in these factors can lead to shifts in the investment schedule and, consequently, the IS curve. The other options listed (interest rate, price level, consumption, and saving) are still exogenous variables in the IS curve.

In the Development of the IS Curve,one Variable That Turns