ECON 212 notes

1. In an economic model, an exogenous change is one that comes from outside the model
and is unexplained by the model. For example, in the simple supply and demand model, a
change in consumer tastes or preferences is unexplained by the model and also leads
to endogenous changes in demand that lead to changes in the equilibrium price. Similarly, a
change in the consumer's income is given outside the model but affects demand. Put
another way, an exogenous change involves an alteration of a variable that is autonomous,
i.e., unaffected by the workings of the model.

2.