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Unformatted text preview: Explaining an Economic Event Economic Variable: any economic measure that can vary over a range of values. Economic Variables: Examples GDP Healthcare spending Healthcare spending share of GDP Relative price of health care Explaining an Economic Event Positive Correlation: occurs when two variables move in the same direction; when one goes up, the other goes up. Negative Correlation: occurs when two variables move in different directions; when one goes up, the other goes down. Figure 4: Price of Gasoline versus Price of Crude Oil Explaining an Economic Event Correlation versus Causation Correlation: means that one event is usually observed to occur along with another. Causation: me...
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