Suppose that an examination of data reveals a positive correlation between the demand for new homes and
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Suppose that an examination of data reveals a positive correlation between the demand for new homes and the price of lumber. Which of the following conclusions can be correctly inferred from the existence of this correlation? Why?
a. An increase in the demand for homes causes an increase in the price of lumber.
b. The observed correlation is consistent with a theory that an increase in demand for new homes causes an increase in the price of lumber.
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