Which of the Following Statements About a High Correlation Between

question 86

Multiple Choice

Which of the following statements about a high correlation between two variables s and t is FALSE?

• A)s may cause t.
• B)t may cause s.
• C)They both may be affected by a third variable.
• D)The correlation establishes an economically plausible relationship between costs and their cost drivers.
• E)The correlation may be due to random chance.

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Definitions:

Soviet Model

An economic and political system found in the former Soviet Union, characterized by state ownership of resources, central planning, and one-party rule.

Karl Marx

A 19th-century philosopher, economist, and socialist who analyzed the effects of capitalism and proposed a revolutionary class struggle leading to a society with no class distinctions.

Public Ownership

Ownership of assets by the government or a government entity, rather than by private individuals or organizations.

Laissez-faire

An economic system in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, and tariffs.