Why Do Correlation Coefficients Greater Than 0

question 80

Multiple Choice

Why do correlation coefficients greater than 0.50 rarely occur in the social sciences?

• A) Human behavior is the product of many interacting variables; any single variable will be limited in its association with a behavior.
• B) Social scientists fail to construct experiments carefully enough to detect larger correlations.
• C) The highest value a correlation coefficient can take on is 0.60.
• D) Social scientists have not yet discovered the variables that are the best predictors of human behavior.

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Definitions:

Excess Reserves

Assets retained by banks exceeding the compulsory minimum reserves stipulated by central bank regulations.

Deposits

Money placed into a financial institution for safekeeping, which can earn interest over time depending on the type of account.

Reserves

Assets kept on hand by a bank, company, or government to meet future liabilities, emergencies, or regulatory requirements.

Easy Money Policy

A monetary policy that increases the money supply and lowers interest rates, aimed at stimulating economic growth.