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It is best to define the parameters before you begin building logic because the step plugins will provide the defined parameters as options when building steps.
API Input Parameters
When creating an API input parameter, you will specify if the parameter is coming from the query string, header, or body.
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Editing a Path parameter from the Input Parameters panel provides a limited dialog, as seen below, because the Name and From values are defined in the HTTP path definition
Module Parameter
API Output Parameters
You can create a different set of output parameters for each HTTP status code you add to the API file.
When creating an API output parameter, the output parameter you create will be associated with the HTTP status selected in the drop down.