When One Finds That There Is a Strong Correlation Between

question 20

Multiple Choice

When one finds that there is a strong correlation between X and Y it is possible that.....

• A)changes in X cause changes is Y.
• B)changes in Y cause changes is X.
• C)changes in X and Y are due to another variable.
• D)all of these

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Definitions:

Gold Standard

A monetary system in which the value of a country's currency is directly linked to a fixed amount of gold, allowing for the conversion of currency into a specified amount of gold.

Floating Exchange Rates

A currency valuation system where exchange rates are determined by the free market forces of supply and demand without direct government intervention.

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage.

Creditor Nation

A country that has more investments abroad than other countries have in it, leading to a net positive international investment position.