Worksheet: Correlation | Economics Class 11 - Commerce PDF Download

Multiple Choice Questions

Q2: Correlation is an analysis of ____ between two or more variables.
(a) relationship
(b) covariation
(c) determination
(d) calculation

Q3: Scatter diagram can be used to indicate which of the following degrees of correlation?
(a) Perfect positive correlation
(b) Perfect negative correlation
(c) No correlation
(d) All of the above

Q4: Which of the following techniques deals with the association between two or more variables?
(a) Index number
(b) Correlation
(c) Dispersion
(d)None of these

Q5: When the mean of series is a decimal number, then which method should be used for computing Karl Pearson’s coefficient of correlation?
(a) Direct Method
(b) Short-cut Method
(c) Step Deviation Method
(d) None of these

Q6: When two variables move together in the same direction, it is said to be
(a) no correlation
(b) negative correlation
(c) positive correlation
(d) zero correlation

Q7: The coefficient of correlation is independent of
(a) change of scale only
(b) change of origin only
(c) both change of scale and origin
(d) None of the above

Q8: A modified version of Karl Pearson’s formula is
(a) r=∑xy/∑x2.∑y2
(b) r= ∑xy/√∑x2x∑y2
(c) r= ∑xy/n∑x2·∑y2
(d) r= ∑xy/nδx·δy  

Q9: Karl Pearson’s coefficient of correlation indicates the ...... and also the degree of relationship between the two variables.
(a) direction
(b) relation
(c) interpretation
(d) None of these

Q10: Which of the following pair is correctly matched?  
Codes
(a) A–(i)
(b) B–(ii)
(c) C–(iii)
(d) None of these

Q11: Statement I Correlation is a multivariate analysis.
Statement II Partial correlation considers all other variables to be constant.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect

Q12: The minimum limit of correlation under Karl Pearson’s method is
(a) −1
(b) 0
(c) 1
(d) None of these

Q13: If the dots in a scatter diagram fall on a narrow band, it indicates a ..........degree of correlation.
(a) zero
(b) high
(c) low
(d) None of these

Q14: Statement I Non-linear correlation is also called curvy linear correlation.
Statement II Numerical measure of correlation is called coefficient of determination.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect

Q15: Coefficient of correlation lies between
(a) 0 and +1
(b) 0 and –1
(c) –1 and +1
(d) – 3 and +3

Assertion–Reasoning based  MCQs

Q2: Assertion (A) Sale of ice-cream increases during summer, shows positive correlation.
Reason (R) When two variables move in same direction, it shows positive correlation.

Q3: Assertion (A) Broadly, there only two types of correlation i.e., positive and negative.
Reason (R) The correlation is said to be positive when the variables move together in the same direction, the correlation is negative when they move in opposite directions.

Q4: Assertion (A) Karl Pearson’s method is non-mathematical in nature.
Reason (R)Degree of correlation helps in identifying the nature of correlation between variables.

Case Study Questions Measures of Correlation

Q2: Which method of calculating correlation uses actual mean?
(a) Karl Pearson’s coefficient of correlation
(b) Scatter diagram method
(c) Spearman’s rank correlation method
(d) Both (a) and (c)

Q3: In perfect positive correlation, the value of ‘r’ is____.
(a) –1
(b) 0
(c) 1
(d) infinity

Q4: Which of the following tools can be used to know the pattern of demand during lockdown?
(a) Correlation
(b) Causation
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Q5: What will be the coefficient of correlation between demand for car and varied level of income due to nationwide lockdown?
(a) Positive correlation
(b) Negative correlation
(c) Perfect positive correlation
(d) No correlation

Q6: The correlation between using mask and being injected by the virus will be
(a) positive
(b) negative
(c) Not correlated
(d) Either (a) or (b)

Short Answer Type Questions 

Q2: What do you understand by ‘spurious’ or ‘non-sense’ correlation?

Q3: Give the advantages of Karl Pearson’s coefficient of correlation.

Q4: List some variables where accurate measurement is difficult.

Q5: Interpret the values of r as 1, –1 and 0.

Q6: Can r lie outside the −1 and 1 range depending on the type of data?

Q7: Give the disadvantages of Karl Pearson’s coefficient of correlation.

You can access the solutions to this worksheet here.