Correlation

The main purpose of correlation analysis in economics is to:

1. Measure only national income
2. Study and measure relationships between economic variables
3. Eliminate all statistical errors
4. Replace economic theory

Which of the following is not a type of correlation based on direction?

1. Positive correlation
2. Negative correlation
3. Zero correlation
4. Frequency correlation

Correlation analysis is useful for:

1. Destroying data
2. Studying relationships between variables
3. Eliminating statistical calculations
4. Replacing data collection

If all points in a scatter diagram lie exactly on a straight upward-sloping line, the correlation is:

1. Perfect negative
2. Zero
3. Perfect positive
4. Weak positive

Correlation does not necessarily imply:

1. Association
2. Relationship
3. Cause-and-effect relationship
4. Statistical connection

Which of the following pairs generally shows negative correlation?

1. Income and savings
2. Education and income
3. Price and demand
4. Experience and salary

Which of the following pairs is most likely to have positive correlation?

1. Price and demand
2. Income and expenditure
3. Speed and travel time for a fixed distance
4. Interest rate and borrowing

Which method provides a numerical measure of correlation?

1. Pie chart method
2. Karl Pearson's coefficient of correlation
3. Tabulation only
4. Frequency distribution

Which diagram is commonly used to study correlation visually?

1. Pie chart
2. Scatter diagram
3. Histogram
4. Bar diagram

A correlation coefficient equal to zero indicates:

1. Perfect positive correlation
2. Perfect negative correlation
3. No linear correlation
4. Complete dependence

The value of the correlation coefficient always lies between:

1. 0 and 100
2. -100 and +100
3. -1 and +1
4. -10 and +10

Which of the following represents perfect positive correlation?

1. r = -1
2. r = 0
3. r = +1
4. r = 0.5

When one variable increases while the other decreases, the correlation is:

1. Positive correlation
2. Negative correlation
3. Perfect correlation
4. Zero correlation

A correlation in which both variables move in the same direction is called:

1. Negative correlation
2. Zero correlation
3. Positive correlation
4. Perfect negative correlation

Correlation refers to the:

1. Difference between two variables
2. Relationship between two or more variables
3. Total value of variables
4. Classification of data