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In the simple [[supply and demand]] model, a change in consumer tastes is unexplained by the model and imposes an exogenous change in demand that leads to a change in the endogenous [[economic equilibrium|equilibrium]] price and the endogenous equilibrium quantity transacted. Here the exogenous variable is a [[parameter]] conveying consumer tastes. Similarly, a change in the consumer's income is exogenously given, outside the model, and appears in the model as an exogenous change in demand.<ref name=Mankiw/>{{rp|p. 10}}
In the [[IS–LM model|LM model]] of interest rate determination,<ref name=Mankiw/>{{rp|pp. 261–7}} the supply of and demand for [[money]] determine the [[interest rate]] contingent on the level of the money supply, so the [[money supply]] is an exogenous variable and the interest rate is an endogenous variable.
In a model of [[firm behavior]] with competitive input markets, the prices of [[input (economics)|inputs]] are exogenously given, and the amounts of the inputs to use are endogenous.<ref name=Varian/>{{rp|p. 202}}
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==Sub-models and models==
An economic variable can be exogenous in some models and endogenous in others. In particular this can happen when one model also serves as a component of a broader model. For example, the [[IS-LM|IS]] model of only the goods market<ref name=Mankiw/>{{rp|pp. 250–260}} derives the market-clearing (and thus endogenous) level of [[output (economics)|output]] depending on the exogenously imposed level of [[interest rate]]s, since interest rates affect the [[physical investment]] component of the demand for goods. In contrast, the [[IS-LM|LM]] model of only the money market takes income (which [[identity (mathematics)|identically]] equals output) as exogenously given and affecting [[money demand]]; here equilibrium of money supply and money demand endogenously determines the interest rate. But when the IS model and the LM model are combined to give the [[IS-LM model]],<ref name=Mankiw/>{{rp|pp. 268–9}} both the interest rate and output are endogenously determined.
[[:Category:Technical terminology]]
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