Why Is It Unwise to Conclude That If Two Variables

question 168

Multiple Choice

Why is it unwise to conclude that if two variables are correlated, one must have caused the other?

• A) Variables can never be measured with complete accuracy.
• B) Any single variable is bound to have multiple causes.
• C) Some unmeasured third variable might make them appear related when in fact they are not.
• D) It is impossible to conclude that two variables are related unless one can measure them perfectly.

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Definitions:

Financial Statement Column

A column in a financial statement that categorizes financial data, such as assets, liabilities, revenues, or expenses, to help analyze financial health.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts and prepare the accounts for the next period.

Owner's Equity Statement

A financial statement that shows the changes in the equity of a company's owner(s) over a period of time.

Net Income

The amount of money that remains after all operating expenses, taxes, and interest have been deducted from total revenue.