Explain What It Means That Third Variables Are "External" to the Causal

question 49

Essay

Explain what it means that third variables are "external" to the causal variable and mediators are "internal" to the causal variable.

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Definitions:

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulating the social or political environment.

Net Social Gain

The total benefit to society from producing and consuming a good or service, taking into account both the private benefits and costs and any external benefits or costs.

Innovation

The process of creating new products, services, processes, or technologies that deliver value to society or the market.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.