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.

Question

Quizplus · Accepted Answer

The statement about the correlation establishing an economically plausible relationship does not necessarily imply causation. The high correlation simply means that the variables are strongly related, but it does not necessarily mean that one causes the other. The other statements (A, B, C, and E) are all possible explanations for a high correlation between two variables.

Which of the Following Statements About a High Correlation Between