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Correlation — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsCorrelation4 Marks
Question
Consider the examples given below:
  1. As price falls, demand for product 'A' increases.
  2. Effect of adequate irrigation facilities, fertilisers and pesticides on per hectare productivity of wheat.
On the basis of above examples explain the main difference between simple correlation and multiple correlation.
✓

Answer

The first example involves only two variables, viz. price and demand. Therefore, it relates to simple correlation.
The second example involves more than two variables, i.e. how the productivity of wheat is affected by use of irrigation facilities, fertilisers and pesticides. Therefore, it relates to multiple correlation.
The main difference between simple correlation and multiple correlation is:
S. No.
Simple Correlation
Multiple Correlation
(i)
When the relationship between only two variables is studied, it is called simple correlation.
When the relationship among three or more than three variables is studied simultaneously, it is called multiple correlation.

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