Using ________ we can predict how ________ changes may affect the link between M and Y.
A) a structural model; institutional
B) a structural model; political
C) reduced form evidence; institutional
D) reduced form evidence; political

Question

Quizplus · Accepted Answer

A structural model allows us to analyze the underlying causal relationships between variables, such as M and Y, and predict how changes in one variable may affect the other. Institutional factors, such as laws and regulations, can also be incorporated into the model to examine their impact on the relationship between M and Y. Political factors are less relevant for predicting how changes may affect the link between M and Y, as they do not necessarily reflect the underlying causal mechanisms at play. Reduced form evidence, on the other hand, only provides correlations between variables and does not allow for a clear analysis of causal relationships.

Using ________ We Can Predict How ________ Changes May Affect

Using We Can Predict How Changes May Affect