the economics of money, banking, and financial markets

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27.3 APPENDIX 27.1 Evaluating Empirical Evidence: The Debate over the Importance of
Money in Economic Fluctuations

1. 
   

   Evidence that examines whether one variable has an effect on another by simply looking
   directly at the relationship between the two variables is ____.
   A) reduced-form evidence
   B) organizational-model evidence
   C) direct-model evidence
   D) structural-model evidence
   Answer: A
   Diff: 2 Type: MC Page Ref: 27.1A- 1
   Skill: Recall
   Objective List: Appendix: Evaluating Empirical Evidence

   
   


2. 
   

   Evidence that is based on a variable having its effect on another variable through channels
   rather than a direct effect is known as ____.
   A) indirect-model evidence
   B) organizational-model evidence
   C) reduced-form evidence
   D) structural-model evidence
   Answer: D
   Diff: 2 Type: MC Page Ref: 27.1A- 1
   Skill: Recall
   Objective List: Appendix: Evaluating Empirical Evidence

   
   


3. 
   

   A ____ model is one that describes how ____.
   A) structural; the economy works
   B) structural; prices change
   C) simple; the economy works
   D) analytical; prices change
   Answer: A
   Diff: 1 Type: MC Page Ref: 27.1A- 1
   Skill: Recall
   Objective List: Appendix: Evaluating Empirical Evidence

   
   


4. 
   

   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
   Answer: A
   Diff: 3 Type: MC Page Ref: 27.1A- 1
   Skill: Recall
   Objective List: Appendix: Evaluating Empirical Evidence