Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 10 - Determining How Costs Behave - Assignment Material - Questions - Page 407: 10-4

Answer

No, I don't agree. High correlation between two variables does not necessarily imply a cause-and-effect relationship. Correlation measures the statistical relationship between variables, indicating how they tend to move together. However, it doesn't prove causation. There could be a third variable influencing both, or the relationship could be coincidental. Causation requires more rigorous investigation and evidence, such as experimental studies or a strong theoretical basis. Correlation is a useful starting point, but it does not by itself establish cause and effect.

Work Step by Step

No, I don't agree. High correlation between two variables does not necessarily imply a cause-and-effect relationship. Correlation measures the statistical relationship between variables, indicating how they tend to move together. However, it doesn't prove causation. There could be a third variable influencing both, or the relationship could be coincidental. Causation requires more rigorous investigation and evidence, such as experimental studies or a strong theoretical basis. Correlation is a useful starting point, but it does not by itself establish cause and effect.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.