Zero correlation between two variables implies that:
A) both variables move in the same direction.
B) the variables are not related to each other.
C) both variables move in the opposite direction.
D) change in one variable causes the other to change.
12) Which of the following relationships is most likely to exhibit zero correlation?
A) The relationship between income and savings
B) The relationship between education and income
C) The relationship between wind velocity and rotational speed of wind turbines
D) The relationship between the amount received as unemployment benefits in China and the unemployment rate in Canada
13) Data shows that in 2012, the college enrollment in Lithasia increased. In the same year, the sale of hotdogs in Lithasia also increased. The relationship between college enrollment and the sale of hotdogs exhibits:
A) a zero correlation.
B) a causal relationship.
C) a positive correlation.
D) a negative correlation.
14) An omitted variable is a variable which:
A) is purposely left out as it does not aid an economic analysis.
B) does not cause other variables in a study to change when it changes.
C) is removed from a study as it can lead to the problem of reverse causality.
D) has been left out, and if included, would explain why the variables considered in a study are correlated.
15) ________ occurs when the direction of cause and effect is mixed up in a study.
A) Adverse causality
B) Reverse causality
C) Omitted variable bias
D) Limited information bias
16) Which of the following claims is most likely to suffer from reverse causality?
A) Higher income increases consumption.
B) Relatively wealthy people tend to be relatively healthy.
C) More hours of study is likely to lead to better results.
D) Crime rate is seen to be lower in countries having a higher level of poverty.
17) An experiment refers to:
A) a simplified representation of some real life phenomenon.
B) the process of collecting, measuring, and organizing data.
C) validating the claims of a model using statistics and facts.
D) a controlled method of investigating causal relationships among variables.
18) Which of the following is a feature of experiments?
A) Experiments are restricted to laboratories.
B) Experiments are carried out only in the study of economics.
C) Experiments help determine cause and effect between variables.
D) Experiments require the division of participants into a treatment group and a test group.
19) To conduct a randomized experiment, researchers usually classify the participants into a:
A) study group and a control group.
B) treatment group and a test group.
C) study group and a treatment group.
D) treatment group and a control group.
20) Randomization is the assignment of subjects by ________ to a ________.
A) chance, rather than by choice; treatment group or into a test group.
B) choice, rather than by chance; treatment group or into a test group.
C) choice, rather than by chance; treatment group or into a control group.
D) chance, rather than by choice; treatment group or into a control group.
21) Which of the following statements is true?
A) Randomization is not used in medical experiments.
B) Randomization allows for classification of participants according to their choice.
C) The subjects in the treatment group and the control group of an experiment are identical in all respects and they are treated identically.
D) The subjects in the treatment group and the control group of an experiment are treated identically, except along a single dimension.
22) A researcher wants to test the effects of daily meditation on stress levels of individuals. She divides the participants randomly into a treatment group and into a control group and conducts an experiment. She pays for meditation classes for one-half of the subjects, and the other half does not join the class. Which of the following statements is true of the two groups in this experiment?
A) The participants in the treatment group are assigned by chance, whereas the ones in control group are assigned by choice.
B) The participants in the control group are assigned by chance, whereas the participants in the treatment group are assigned by choice.
C) The treatment group is the group of subjects which receives finance from the researcher for meditation classes; the control group is the group which does not.
D) The control group is the group of subjects which receives finance from the researcher to join the meditation class; the treatment group is the group which does not.
23) Which of the following is NOT a problem associated with randomized experiments?
A) Experiments can sometimes get expensive for the researcher.
B) The participants in the treatment group and control group are not identical in all respects.
C) Getting immediate answers to some important questions may not be possible.
D) Sometimes experiments are conducted poorly, which may lead to inaccurate results.
24) A natural experiment is an empirical study:
A) in which the predictions of the model are not required to be tested with data.
B) which can only be used to understand natural phenomena and is widely used in subjects such as physics and biology.
C) in which the researcher assigns subjects to control and treatment groups to verify a cause-effect relationship.
D) in which some process, outside the control of the experimenter, has assigned subjects to control and treatment groups in a random or nearly random way.
25) Which of the following is an example of a natural experiment?
A) A laboratory research on the effectiveness of solar power as an alternative source of fuel
B) A research on the effectiveness of a new medicine among some voluntary participants
C) A research on the effect of air pollution on lung disorders by observing the health conditions of people who stay close to industrial areas and those who stay away from industries
D) A study on the benefits of regular exercise by paying for the membership fees at fitness clubs for one-half of the participants
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