Produced fabricated info about American university (7)
I believe the answer is:
limited
'produced fabricated info about american university' is the definition.
I can't judge whether this definition defines the answer.
'produced fabricated info about american university' is the wordplay.
'produced fabricated info' becomes 'lied' (to lie is to produce false information).
'about' means one lot of letters goes inside another.
'american university' becomes 'MIT' (Massachusetts Institute of Technology).
'lied' going around 'mit' is 'LIMITED'.
(Other definitions for limited that I've seen before include "Restricted in extent" , "Constrained" , "Bounded, circumscribed" , "plc" , "was restricting" .)