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An examination of data reveals a positive correlation between the demand for new computers and the price of processors. Which of the following conclusions can be correctly inferred from the existence of this​ correlation? Why?

​1) An increase in the demand for new computers causes an increase in the price of processors.
​2) The observed correlation is consistent with a theory that an increase in demand for new computers causes an increase in the price of new processors .

Multiple choice:
*pick between conclusion 1 and 2* *then pick whether or not there is direct evidence*

Conclusion (1 // 2) can be correctly inferred from the existence of this correlation because there ( is // is not ) direct evidence of a causal relationship between the demand for new computers and the price of processors.

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User Mahesh
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Conclusion 2 can be correctly inferred from the existence of this correlation because there is direct evidence of a causal relationship between the demand for new computers and the price of processors.

The positive correlation between the demand for new computers and the price of processors suggests that as the demand for new computers increases, the price of processors also increases. This implies that there is a cause-and-effect relationship between the two variables. When the demand for new computers goes up, manufacturers need to produce more processors to meet the increased demand. This increased demand for processors can lead to higher prices due to factors like limited supply or increased production costs.

However, it is important to note that correlation does not always imply causation. While the observed correlation supports the theory that an increase in demand for new computers causes an increase in the price of processors, additional research and evidence would be needed to establish a direct causal relationship between the two variables.

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User Kakashy
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