What Do You Know About the Reduced-Form Evidence in Describing

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The Answer is The quantity theory approach to aggregate demand does not describe specific ways in which the money supply affects aggregate spending, Instead, it suggests that the effect of money on economic activity should be examined by looking at whether movements in Y are tightly linked to movements in M. Reduced-form evidence analyzes the effect of changes in M on Y as if the economy were a black box whose workings cannot be seen.

What Do You Know About the Reduced-Form Evidence in Describing

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