I the Strength of the Correlation Between Two Variables Depends

question 14

Multiple Choice

i. The strength of the correlation between two variables depends on the sign of the coefficient of correlation.
Ii) A coefficient of correlation r close to 0 (say, 0.08) shows that the relationship between two variables is quite weak.
Iii) Coefficients of -0.91 and +0.91 have equal strength.

• A) (i), (ii) and (iii) are all correct statements
• B) (i) and (ii) are correct statements, but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) All statements are false

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate cost of living changes.

Market Basket

A selected group of goods and services used to track inflation and other economic indicators through price changes.

Base Year

A specific year against which economic growth is measured, serving as a standard point of comparison for real economic calculations such as GDP.