A basic principle in economics is that ________ does not necessarily imply ________.
A) correlation; causation
B) correlation; significance
C) causation; correlation
D) Both A and C

Question

Quizplus · Accepted Answer

The basic principle in economics is that correlation does not necessarily imply causation. Just because two variables are correlated does not mean that one caused the other. There could be other factors at play that have an impact on both variables. Therefore, it is important to carefully consider causality and not just rely on correlation when making economic decisions. Option B is incorrect because significance refers to the probability of a result occurring by chance, not causality. Option C is partly correct, but it does not address the possibility of other factors influencing both variables.

A Basic Principle in Economics Is That ________ Does Not