All of the following are endogenous variables in the dynamic model of aggregate demand and aggregate supply except: A) Y_t, output B) $\pi _ { \mathrm { t } } ^ { \mathrm { * } }$ central bank's inflation target C) r_t, real interest rate D) E_t $\pi$_{t + 1}, expected inflation

Question

Quizplus · Accepted Answer

The variables Y_t (output), r_t (real interest rate), and E_tF1F1F1S1F1F1F10_{t + 1} (expected inflation) are all endogenous variables in the dynamic model of aggregate demand and aggregate supply because they are determined within the model. However, the variable $\pi _ { \mathrm { t } } ^ { \mathrm { * } }$ (central bank's inflation target) is an exogenous variable that is set by the central bank and is not determined within the model. Therefore, the correct answer is B.

All of the Following Are Endogenous Variables in the Dynamic πt∗\pi _ { \mathrm { t } } ^ { \mathrm { * } }πt∗​

All of the Following Are Endogenous Variables in the Dynamic $\pi _ { \mathrm { t } } ^ { \mathrm { * } }$