If the Coefficient of Correlation Is -0

question 70

Multiple Choice

If the coefficient of correlation is -0.4, then the slope of the regression line

• A)must also be -0.4
• B)can be either negative or positive
• C)must be negative
• D)must be 0.16

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Definitions:

Substitution Effect

The economic theory that as prices rise, consumers will replace more expensive items with less costly alternatives, thereby altering the demand for these goods.

Wage Rate

The amount of money paid to employees for their work or services, typically expressed per hour or year.

Output Effect

The impact on total production when a firm adjusts its output level in response to a change in price.

Interest Rates

The cost of borrowing money or the return on investment for savings and loans, influencing economic activity by affecting consumer spending and business investments.