What is the meaning of the statement "correlation does not mean causation"?
What will be an ideal response?
Just because two variables are correlated, meaning that they move together, does not mean that one of the variables is the cause of movement in the other. For example, sales of gasoline and incidence of sunburn are strongly correlated in the U.S. However, this does not mean that sunburns cause people to buy more oil or that buying oil causes sunburns. There is another explanatory variable involved, namely the season of the year, since people both drive more and are outside in the sun more during the summer months.
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A fundamental problem in international economics is how to produce
A) a perfect degree of monetary harmony. B) an acceptable degree of harmony among the international trade policies of different countries. C) a world government that can harmonize trade and monetary policies D) a counter-cyclical monetary policy so that all countries will not be adversely affected by a financial crisis in one country. E) a worldwide form of currency.
You have a bond that you can redeem for $10,000 one year from now. The interest rate is 3 percent (0.03) per year. How much is the bond worth today?
a. $9,090.91 b. $10,000.00 c. $8,264.46 d. $9,708.74 e. $9,000.00
Between 1960 and 1980, the female/male annual earnings ratio of full-time workers ____. Between 1980 and 2011, the female/male annual earnings ratio of full-time workers ____
a. changed very little; fell b. changed very little; rose c. fell; changed very little d. rose; changed very little
Information asymmetry is not a problem when:
A. both parties lack the same information. B. the wants of both parties are opposed to one another. C. the wants of both parties are aligned with one another. D. the constraints of both parties are identical.