Causation, correlation...
Causation, correlation...
Economics is the study of the efficient allocation of resources. There are a very large number of variables with complex interactions between them. Econometricians design models to represent an economy - or some aspect of it - and then use statistical methods to estimate relationships between the variables.
Usually the expression is employed in the context of the relationship between a dependent variable and another variable. The latter may or may not be independent: often it is time but that is not necessary. In some cases there is some indication that that there is a linear relationship between the two variables and that relationship is referred to as a trend.Note that a trend is not the same as causation. There may appear to be a strong linear trend between two variables but the variables may not be directly related at all: they may both be related to a third variable. Also, the absence of linear trends does not imply that the variables are unrelated: there may be non-linear relationships.
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Some people will give the answer "correlation". But that is not correct for the following reason: Consider the coordinates of a circle. There is obviously a very strong relationship between the x coordinate and the y coordinate. The correlation between the two is not just small, but 0. The correlation between two variables is a measure of the linear relationship between them. But there can be non-linear relationships which will not necessarily be reflected by any correlation.
It means that the variables are related in some way; one affects the other.
A line graph can tell you how changes in one variable are related to changes in the other. A line graph cannot show causality. A line graph can show non-linear relationships which some other analytical techniques may not identify. In particular, they are good for identifying relationships between the variables that change over the domain. A line graph can also help identify points where the nature of the relationship changes - eg tension and breaking point, or temperature and phase. The spread of observations about the "line of best fit" gives a measure of how closely the variables are related and how much of the measurement is systemic or random error.
by their increase or decrease
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