Which of the following statements identifies a difference between correlation and causation?
A) Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things.
B) Causation cannot arise when correlation is present, and correlation cannot arise when causation is present.
C) Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another.
D) A causal relationship exists between two variables when they are correlated, but correlation does not necessarily exist if there's a causal relationship between two variables.
Question 2
Economic growth will be associated with a constant price level when
A) the increase in aggregate demand is accompanied by a reduction in short-run aggregate supply.
B) the increase in aggregate demand is less than the increase in long-run aggregate supply.
C) the increase in aggregate demand exactly equals the increase in long-run aggregate supply.
D) the increase in aggregate demand is more than the increase in long-run aggregate supply.
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Table - Correlation Analysis
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