ECS2602 Assignment 2 Semester 1
&
2 2021
written by
Mishka Reddy
, ECS2602
ASSIGNMENT 2 SEMESTER 1 & 2
2021
UNIQUE NUMBER:523068/687711
PREVIEW OF QUESTION 1
1. 2 The correct option is 2. The fully exogenous variables in the IS-LM model are
government spending, taxation, money supply and the marginal propensity to
consume. See section 4.5 (learning unit 4) in the study guide. Make sure that you
know the difference between the exogenous and endogenous variables in the
IS-LM model.
Note that in the IS-LM model the part of investment (I) that is dependent on the level
of output and income and the interest rate are the endogenous components while
the part of investment (Ī) that is influenced by expectations, business confidence,
and political and social factors is the exogenous component of investment. This is
known as autonomous or exogenous investment
&
2 2021
written by
Mishka Reddy
, ECS2602
ASSIGNMENT 2 SEMESTER 1 & 2
2021
UNIQUE NUMBER:523068/687711
PREVIEW OF QUESTION 1
1. 2 The correct option is 2. The fully exogenous variables in the IS-LM model are
government spending, taxation, money supply and the marginal propensity to
consume. See section 4.5 (learning unit 4) in the study guide. Make sure that you
know the difference between the exogenous and endogenous variables in the
IS-LM model.
Note that in the IS-LM model the part of investment (I) that is dependent on the level
of output and income and the interest rate are the endogenous components while
the part of investment (Ī) that is influenced by expectations, business confidence,
and political and social factors is the exogenous component of investment. This is
known as autonomous or exogenous investment
