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It is a variable that affects the variable we wish to predict. Let’s say that sales depend on price. Then, price is the independent variable that affects the sales. An independent variable is also called explanatory variable, predictor variable, and driver. Independent variables are of two types: external and internal. External variables are those over which we have no control, and thus cannot be manipulated. The state of the economy, the unemployment rate, and competitive prices are a few examples of external variables. Internal variables, on the other hand, are those over which we have control, and thus can be manipulated to meet a certain goal. They are also called manipulated and controlled variables. Price, media spending, and the number of new launches are a few examples of internal variables.