Which of the Following Statements Is Correct Concerning Correlation Coefficients

question 15

Multiple Choice

Which of the following statements is correct concerning correlation coefficients?

• A) A correlation of +.89 is strong and -.89 is weak.
• B) A correlation of +.89 and -.89 are both strong and equally so.
• C) Correlation coefficients are indicators of cause and effect.
• D) A correlation of +1.5 is very strong

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of demand to price changes.

Demand Function

Indicates the relationship between the quantity of a good demanded by consumers and the good’s price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage.

Demand Function

A mathematical representation that describes the quantity of a good or service consumers are willing and able to purchase at various prices.