Which Statement Is TRUE Concerning a Coefficient of Correlation

question 81

Multiple Choice

Which statement is TRUE concerning a coefficient of correlation?

• A) A correlation coefficient is an index of the causal relationship between two variables.
• B) A correlation coefficient may be useful in prediction.
• C) It covaries with the standard deviation.
• D) It came about as a result of someone asking Francis Galton what his "sign" was.

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Definitions:

Excludable

Describes a good or service for which it is possible to prevent non-paying consumers from access, through mechanisms like price or physical restrictions.

Public Good

A product or service that is made available to all members of a society, typically free of charge, and which no individual can be excluded from using.

Common Resource

A shared resource that multiple parties can access and use, which often leads to overuse and depletion due to a lack of exclusive ownership.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods or services that extend beyond the direct participants in an economic activity.