Which of the Following Is Not True of Correlation

question 143

Multiple Choice

Which of the following is not true of correlation?

• A) The fact that there is a correlation between two variables means that one variable causes the other, but it isn't clear which is cause and which is effect.
• B) A negative correlation means that an increase in the value of one variable is associated with a decrease in the value of the other variable.
• C) The number in a correlation coefficient indicates the relative strength of the relationship between two variables-the higher the number, the stronger the relationship.
• D) Correlations are useful in making predictions. The stronger the relationship between the variables, the better the prediction.

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Definitions:

Regressive

A type of tax system in which the tax rate decreases as the taxable amount increases, often placing a higher burden on lower-income earners.

Inelastic Supply

A situation where the supply of a good does not significantly change when its price changes, often due to limitations in production capabilities or time constraints.

Excise Tax

A tax imposed on specific goods or services, such as tobacco and alcohol, often intended to discourage their use or generate revenue.

Proportional

In economics, proportional refers to a relationship or distribution that remains the same in proportion or rate, such as a tax that takes the same percentage from all income earners.