What is the difference between an endogenous variable and an exogenous variable?
What will be an ideal response?
An endogenous variable is a variable explained by an economic model. An exogenous variable is a variable that is taken as given and is not explained by an economic model.
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The effect of an increase in consumer income on equilibrium price and quantity of Florida orange juice (a normal good) is
a. to increase equilibrium price and quantity b. to decrease equilibrium price and quantity c. to increase equilibrium price and decrease equilibrium quantity d. to increase equilibrium quantity and decrease equilibrium price e. that equilibrium price and quantity remain constant
When the economy heads into a recession, automatic stabilizers cause
A. taxes and government spending to rise. B. the government budget deficit to increase. C. taxes and government spending to fall. D. national income to increase.