Explain the difference between correlation and causation and give an example
Please provide the best answer for the statement.
Correlation refers to a systematic association between two sets of data (two outcomes). Causation implies that there is a cause-effect relationship between two events. Correlation does not imply causation. Just because two events are related in a predictable manner does not necessarily mean that one causes the other. More must be known about the cause-effect relationship before conclusions about causation can be drawn.
For example, one could discover a positive correlation between ice-cream sales and the number of drownings. However, this does not mean that eating ice cream causes drowning, nor does it mean that more drownings cause people to buy ice cream!
You might also like to view...
Describe the background factors that contributed to the Asian financial crisis
What will be an ideal response?
The interest rate at which commercial banks lend to their customers with the best collateral is known as
a. prime rate. b. federal funds rate. c. discount rate. d. T-bill rate.
Figure 33-6
?
The long-run Phillips curve in Figure 33-6 (b) would include which of the following points?
A. g, e, m B. g, e, r C. j, e, r D. j, e, m
How were macroeconomic balances different in the period from 2000 to 2007 from past financial crises?
What will be an ideal response?