A(n) ________ of reduced-form evidence is that it cannot rule out ________.
A) disadvantage; reverse causation
B) disadvantage; adverse selection
C) advantage; reverse causation
D) advantage; adverse selection

Question

Quizplus · Accepted Answer

Reduced-form evidence focuses on identifying correlations between variables without necessarily establishing a causal pathway. This means it cannot rule out reverse causation, where it's unclear whether A causes B or B causes A, hence it's a disadvantage.

A(n) ________ of Reduced-Form Evidence Is That It Cannot Rule