You observe in the data that two variables move together.However,since you'd like to know whether a movement in one variable causes movement in the other,you must solve a(n):
A) social efficiency maximization problem.
B) social welfare maximization problem.
C) identification problem.
D) model misspecification problem.

Question

Quizplus · Accepted Answer

The issue described in the question is known as an identification problem. It refers to the challenge of identifying whether a correlation between two variables is due to a causal relationship or simply due to a coincidence. In other words, we must determine whether changes in one variable directly cause changes in the other, or if some other factor is influencing both variables in parallel.

You Observe in the Data That Two Variables Move Together