Two Psychiatrists Conducted an Experiment to Test the Effectiveness of a New

question 16

Multiple Choice

Two psychiatrists conducted an experiment to test the effectiveness of a new drug expected to help people with obsessive-compulsive disorder (OCD) . The researchers tested 60 clients with OCD, randomly assigning 30 to a group that received the drug and 30 to a placebo control group that received a pill without the drug. The use of a placebo control group and random assignment are most closely related to which criterion for showing causation?

• A) Eliminating plausible alternative explanations for why the drug might be effective
• B) Covariation, or showing that the drug and OCD symptoms are associated
• C) Time-order, or showing that the drug was administered before its effectiveness was tested
• D) They are equally related to all three criteria for showing causation.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to assess the profitability of an investment.

Simple Rate

A basic form of interest calculation representing a percentage of the principal amount over a certain period of time.

Payback Period

The payback period is the duration of time it takes to recover the cost of an investment. This metric is commonly used to assess the feasibility or profitability of a project.

Straight-Line Method

A method of calculating depreciation or amortization that allocates evenly the cost of an asset over its useful life.