The Fallacy of Composition Is the Incorrect View That

question 197

Multiple Choice

The fallacy of composition is the incorrect view that

• A) everything else is always held constant when a change occurs.
• B) a small change in an economic variable will have unrecognizable but significant consequences on the economy.
• C) when two events are associated, the one observed first must have caused the second.
• D) if something is true for an individual, then it must also be true for the group.

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Definitions:

Independent Variables

Variables in an experiment or model that are manipulated or categorized to observe their effect on dependent variables.

Highly Correlated

Refers to a strong statistical relationship between two or more variables where changes in one variable are closely associated with changes in another.

Multicollinearity

A statistical phenomenon in which two or more predictor variables in a multiple regression model are highly correlated.

T-Tests

A statistical test used to compare the means of two groups and determine if they are significantly different from each other.