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Explanation: An endogenous factor in economics is something that is explained or calculated from within the model being studied. This is as opposed to an exogenous factor, which is something that comes from outside the model or thought experiment under examination. The endogenous factors in a model are represented by the endogenous variable in a statistical model that's changed or determined by its relationship with other variables within the model. In other words, an endogenous variable is synonymous with a dependent variable, meaning it correlates with other factors within the system being studied. Therefore, its values may be determined by other variables. Endogenous variables are important in econometrics and economic modeling because they show whether a variable causes a particular effect. Economists employ causal modeling to explain outcomes by analyzing dependent variables based on a variety of factors. For example, in a model studying supply and demand, the price of a good is an endogenous factor because the price can be changed by the producer (supplier) in response to consumer demand.