A Few Rules about models
No single model can answer all questins. Just as carpenters use different tools for different tasks, economists uses different models to explain different economic phenomena.Students of macroeconomics must bear in mind that there is no single, correct model useful for all purposes.
Models have two kinds of variables: endogenous variables and exogenous variables.
Endogenous variables are those variables that a model tries to explain.
Exogenous variables are those variables that a model takes as given.
posted by yuhu @ 11:43 PM
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