In the IS equation,which of the following is an exogenous variable?
A)planned investment spending
B)real interest rate
C)consumption
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

An exogenous variable is a variable whose value is determined outside the model. In the IS equation, planned investment spending and consumption are endogenous variables whose value is determined by the model. The real interest rate, however, is determined outside the model and is therefore an exogenous variable.

In the IS Equation,which of the Following Is an Exogenous