Explain Why Causal Conclusions Can Be Drawn from Experimental but Not

question 47

Essay

Explain why causal conclusions can be drawn from experimental but not from correlational studies. Be sure to work "directionality" and "third variable" into your answer.

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Definitions:

FIFO

"First In, First Out," an accounting method for valuing inventory where the first items placed in inventory are the first sold.

Current Costs

The costs that would have to be incurred to replace or reproduce an asset in the current period, under current market conditions.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Net Income

The total earnings of a company after accounting for all expenses, taxes, and additional income streams, representing the company’s profit.