Which of the following is not true about the cause-and-effect criterion when estimating a cost function?
A) Correlation of variables proves cause-and-effect
B) Managers must be careful not to equate high correlation between two variables to mean that either variable causes the other
C) Knowledge of operations can help managers discover cause-and-effect relationships
D) Contractual arrangements may show a direct cause and effect between two variables

Question

Quizplus · Accepted Answer

Correlation of variables does not necessarily prove cause-and-effect relationships. Correlation simply suggests a possible relationship between two variables, but further analysis is needed to determine if a cause-and-effect relationship exists.

Which of the Following Is Not True About the Cause-And-Effect