The Coefficient of Correlation

question 17

Multiple Choice

The coefficient of correlation

• A) is the square of the r-square.
• B) is the square root of the r-square.
• C) can never be equal to r-square.
• D) can never be negative.

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Definitions:

Total Saving

The portion of total income that is not consumed or spent, instead being reserved for future use or investment.

Induced Consumption

Consumer spending that increases when income increases, and decreases when income decreases, not including autonomous consumption that doesn’t change with income.

Disposable Income

Financial capacity reserved for household spending and savings after navigating through income tax deductions.

Autonomous Consumption

The level of consumption expenditure that occurs when income levels are zero, representing the base level of spending that must occur even in the absence of income.