Explain why a high correlation between the independent and dependent variables may or may not necessarily prove that a change in the independent variables may or may not necessarily prove that a change the independent variable causes a change in the dependent variable.

CPA-Advanced-Management-Accounting-Section-5

A high correlation between the independent and dependent variable simply means that the two variables move in the same direction and at almost the same rate. It does not mean that the independent variable will cause a change in the dependent variable. Such information can be determined by use of coefficient of determination.

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