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BANK FAILURE: In principle, this results when a bank's liabilities exceed assets for an extended period and the bank is forced to go out of business. This is comparable to other types of business that go bankrupt. However, because banks are heavily regulated by government entities, including the Federal Reserve System, Federal Deposit Insurance Corporation, and Comptroller of the Currency, bank failure does not necessarily mean that the bank ceases to operated. In may cases, such a failure means the operation of the bank is take over by one of the government entities. The troubled bank might also be allowed or "encouraged" to merge with another, healthier bank.
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                           VARIABLES: Quantities, usually represented as symbols, that can take on one of a set of values. A variable is "variable" because its value can "vary." A primary goal of economic analysis is to determine the specific value that a variable takes on under specific circumstances. Variables are allowed to vary, to take on different values. Models combine variables in a systematic manner (based on the underlying theory). The basic purpose of a model is then to identify different, specific values for the variables.For example, the two key variables in a market model are price and quantity. Analysis of the market model then identifies specific values for price and quantity. Endogenous and ExogenousIn the analysis of a model, variables generally take one of two forms -- endogenous (or dependent) and exogenous (or independent).- Endogenous: The values of endogenous or dependent variables are identified within the workings of the model. For example, price and quantity are endogenous variables for the market model. Endogenous variables are, in essence, the "output" of the model. Their identification is what the model is all about.
- Exogenous: The values of exogenous or independent variables are established outside the workings of the model. For example, income or the cost of a productive resource are common exogenous variables for the market model. Exogenous variables are the "input" of the model. They are pre-determined or "given" to the model.
InteractionThe interaction among endogenous and exogenous variables is key to the analysis of a model. Endogenous variables in a model are identified based on the pre-determined values of exogenous variables. Should these exogenous variables take on different values, then the endogenous variables also generally take on different values.For example, endogenous price and quantity variables identified in a market model are, in part, based on the exogenous variable--the income of the buyers. Should buyers have more or less income, then their demand is likely to change and so too are price and quantity.
Recommended Citation:VARIABLES, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: July 26, 2024].
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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors trying to buy either a rotisserie oven that can also toast bread or a flower arrangement in a coffee cup for your father. Be on the lookout for poorly written technical manuals.
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Helping spur the U.S. industrial revolution, Thomas Edison patented nearly 1300 inventions, 300 of which came out of his Menlo Park "invention factory" during a four-year period.
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