It has been observed in country X that with an increase in college enrollment over a period of six years, the demand for televisions has also increased

Would it be right to conclude that the increase in college enrollment has caused the increase in demand for televisions? Why or why not?


The error in drawing such a conclusion is that the increase in both the variables may represent a correlation and not necessarily a causal relationship. Although both the variables move together, it would be wrong to conclude that an increase in college enrollment is causing an increase in the demand for televisions. There may be other omitted variables such as changes in the per capita income in country X, or changes in the price of satellite television connection over the period of six years.

Economics

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The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper. If Row Restaurant publishes coupons, Column Cafe would earn the highest profit if it:

A. only offered coupons half of the time. B. also published coupons. C. did not publish coupons. D. chooses either strategy because Column Cafe will have the same profit in either case.

Economics

Which of the following would not tend to lower the price of VCRs?

a. decreasing price of DVD players b. increasing price of video cassettes c. improvement in VCR production technology d. reduced price of raw materials used in making VCRs e. increasing price of pay-per-view movies on cable TV

Economics

The chief difference between one-shot inflation and continued inflation is that

A) Keynesians believe all inflations are one-shot inflations and monetarists believe all inflations are continued inflations. B) one-shot inflation is long and continued inflation is short. C) one-shot inflation is a single increase in the price level and continued inflation is a sustained increase in the price level. D) monetarists believe all inflations are one-shot inflations and Keynesians believe all inflations are continued inflations.

Economics

The table below shows the cyclically adjusted budget deficit as a percentage of GDP over a five-year period.YearDeficit(-)11.5%21.432.041.851.5Refer to the above information. In which year(s) was fiscal policy contractionary?

A. Year 3 only B. Years 2, 4, and 5 C. Year 2 only D. Years 1, 2, and 5

Economics