What is endogenous and exogenous in relation to macroeconomic?

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2026-03-06 07:55

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In macroeconomics, endogenous factors are those that are determined within the economic model, such as output, employment, and interest rates, which are influenced by the interactions of various economic agents. Conversely, exogenous factors are external influences that affect the economy but are not determined by the model, such as government policy changes, natural disasters, or global economic conditions. Understanding the distinction between these two types of factors helps economists analyze how various elements interact and impact overall economic performance.

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