If the Population Correlation Between Two Variables Is Determined to Be

question 72

Multiple Choice

If the population correlation between two variables is determined to be -0.70, which of the following is known to be true?

• A) There is a positive linear relationship between the two variables.
• B) There is a fairly strong negative linear relationship between the two variables.
• C) An increase in one of the variables will cause the other variable to decline by 70 percent.
• D) The scatter diagram for the two variables will be upward sloping from left to right.

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Definitions:

Price Ceiling

A regulation that sets the maximum allowable price for a particular good or service, intended to prevent sellers from charging high prices during demand spikes.

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction that they were not directly involved in.