Question 1

What does correlation measure?

Accepted Answer

Correlation measures the direction and strength of the linear relationship between two variables. It indicates how changes in one variable are associated with changes in another variable, ranging from -1 to +1.

Question 2

If both variables move in the same direction, the correlation is:

Accepted Answer

When both variables move in the same direction (i.e., an increase in one leads to an increase in the other, or a decrease leads to a decrease), the correlation is positive.

Question 3

The value of Karl Pearson's coefficient of correlation always lies between:

Accepted Answer

Karl Pearson's coefficient of correlation, denoted by 'r', always lies within the numerical limits of -1 and +1, inclusive.

Question 4

If the value of correlation coefficient is zero, it indicates:

Accepted Answer

A correlation coefficient of zero indicates the complete absence of any linear relationship between the two variables.

Question 5

Which of the following methods is a graphical method of studying correlation?

Accepted Answer

Scatter diagram is a graphical method where data points are plotted on a graph to visually inspect the correlation between two variables.

Correlation — MP Board Class 11 Economics Important Questions & Revision Notes