A Correlation of +1

question 40

Multiple Choice

A correlation of +1.00 between children's physical height and their popularity among their peers indicates that

• A) higher levels of popularity among peers is associated with greater physical height in children.
• B) there is very little relationship between children's height and their popularity.
• C) being unusually short or tall has a negative impact on children's popularity.
• D) children's height has no causal impact on their popularity.

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Definitions:

Velocity of Money

The rate at which money circulates in the economy, calculated as the ratio of nominal GDP to the money supply.

Real GDP

Real Gross Domestic Product, which adjusts the total value of all produced goods and services within an economy in a year for the effects of inflation, showing the real terms of economic output.

Equation of Exchange

An economic equation that relates the quantity of money, its velocity, and the price level of goods and services to the economy's output of goods and services.

Velocity of Money

The rate at which money is exchanged in an economy, often used to measure the health and vigor of economic activity.