All of the following are exogenous variables in the mother of all models in the Appendix to Chapter 14 except the:
A) world interest rate.
B) labor force.
C) world real interest rate.
D) price level.

Question

Quizplus · Accepted Answer

In the context of the "mother of all models" referenced in economic literature, exogenous variables are those that are determined outside of the model and are inputs into it. The world interest rate (A) and the world real interest rate (C) are typically considered exogenous in such models, as they are determined by global financial markets outside of any single country's control. The labor force (B) is also typically considered an exogenous variable because it is determined by demographic factors. However, the price level (D) is an endogenous variable in most economic models, including the "mother of all models," because it is determined within the model by the interaction of supply and demand in the economy.

All of the Following Are Exogenous Variables in the Mother