Identify the direction and all possible interpretations of each of the following correlations. Be sure to identify each example as positive, negative, or zero (not correlated). Then give all possible causal interpretations for the results.

Question

Margaret notices that the temperature in her office drops several degrees from July to December. In a careful review of the budget she discovers that the company’s utility expenses also drop from July to December.

Answer 1

For a positive correlation, both variables increase/decrease together.

For a negative correlation, one variable increases while the other decreases.

I'll let you suggest the causal relations. Does T cause E, E cause T, or some third factor effect both?

Answer 2

positive correlation because the cost of the bill expenses decreases while the temperature drops

interpretations of the results is that temperature influenced by the air conditioner

Answer 3

positive