When Two Variables Are Correlated,it Is Not Clear Which One

question 15

Multiple Choice

When two variables are correlated,it is not clear which one is a causal variable and which is an effect.This ambiguity reflects:

• A) the third variable problem
• B) random error
• C) selection bias
• D) the directionality problem

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Definitions:

Tax

A compulsory financial charge or other levy imposed on an individual or a legal entity by a governmental organization.

Market

A venue for the exchange of goods, services, or information between buyers and sellers, which may be physical or virtual.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.

Market

A place or system where buyers and sellers interact to exchange goods, services, or information.