The distinction between exogenous and endogenous variables is important because:
a. Endogenous variables are fixed by definition.
b. Exogenous variables are fixed by definition.
c. Endogenous variables are determined within the Three-Sector-Model while exogenous variables are not. Endogenous variables are therefore treated as shocks to the Three-Sector-Model.
d. Endogenous variables are determined within the Three-Sector-Model while exogenous variables are not. Exogenous variables are therefore treated as shocks to the Three-Sector-Model.
e. Exogenous variables are determined within the Three-Sector-Model while endogenous variables are not. Endogenous variables are therefore treated as shocks to the three markets.
.D
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Only a market economy must answer the questions of what goods to produce, how to produce them, and for whom to produce them.
Answer the following statement true (T) or false (F)
Market demand curves may slope downward even if some individual demand curves do not because
A. the law of demand requires that this is true. B. lower prices may bring more purchasers into the market. C. merchants try to sell more at lower prices. D. people believe expensive goods are better goods.
If a toy store overestimates the demand for a toy in 2004 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as: a. investment in 2004
b. investment in 2005. c. consumption in 2004. d. consumption in 2005. e. a part of GDP when the toys are sold.
Police protection in a community is an example of a _____
a. merit good b. club good c. public good d. private good