ECONOMICS

COST ACCOUNTING

INFORMATION FOR DECISION MAKING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A correlation is the relationship between two events in which the second event is a consequence of the first.
 A True B False
Explanation:

Detailed explanation-1: -On the other hand, correlation is simply a relationship where action A relates to action B-but one event doesn’t necessarily cause the other event to happen. In this example, there’s a correlation between eating ice cream and getting sunburned because the two events are related.

Detailed explanation-2: -A correlation between variables indicates that as one variable changes in value, the other variable tends to change in a specific direction. Understanding that relationship is useful because we can use the value of one variable to predict the value of the other variable.

Detailed explanation-3: -A correlation is a measure or degree of relationship between two variables. A set of data can be positively correlated, negatively correlated or not correlated at all. As one set of values increases the other set tends to increase then it is called a positive correlation.

Detailed explanation-4: -A correlation is a statistical measure of the relationship between two variables. The measure is best used in variables that demonstrate a linear relationship between each other. The fit of the data can be visually represented in a scatterplot.

Detailed explanation-5: -Correlation tests for a relationship between two variables. However, seeing two variables moving together does not necessarily mean we know whether one variable causes the other to occur. This is why we commonly say “correlation does not imply causation.”

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