The Correlation Between a Family's Weekly Income and the Amount $r = 0.30$

question 106

Multiple Choice

The correlation between a family's weekly income and the amount they spend on restaurant meals
Is found to be $r = 0.30$
Which must be true?
I. Families tend to spend about 30% of their incomes in restaurants.
II. In general, the higher the income, the more the family spends in restaurants.
III. The line of best fit passes through 30% of the (income, restaurant$) data points.

• A) II only
• B) II and III only
• C) I only
• D) I, II, and III
• E) III only

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Definitions:

Statement of Cash Flows

A fiscal report that demonstrates the consequences of shifts in balance sheet accounts and income on cash and cash equivalents, organizing the analysis into operations related to investing, financing, and operating activities.

Investing Transactions

Financial activities related to the purchase and sale of long-term assets or investments.

Financing Transactions

Activities that result in changes to the size and composition of the equity and borrowings of an entity.

Owner's Capital

The amount of money and assets owned by the proprietor in a business after liabilities have been deducted.