If the line graph shows a correlation between advertising spend and sales growth

Practice Questions

Q1
If the line graph shows a correlation between advertising spend and sales growth, what can be inferred?
  1. Advertising has no impact on sales
  2. Higher advertising leads to higher sales
  3. Sales are independent of advertising
  4. Sales growth is due to external factors

Questions & Step-by-Step Solutions

If the line graph shows a correlation between advertising spend and sales growth, what can be inferred?
  • Step 1: Look at the line graph that shows two things: advertising spend and sales growth.
  • Step 2: Notice how the two lines move in relation to each other.
  • Step 3: If the line for advertising spend goes up and the line for sales growth also goes up, this indicates a positive correlation.
  • Step 4: A positive correlation means that as one thing increases (advertising spend), the other thing (sales growth) also tends to increase.
  • Step 5: Therefore, we can infer that spending more on advertising is likely helping to increase sales growth.
  • Correlation vs. Causation – Understanding that correlation does not imply causation; just because two variables are correlated does not mean one causes the other.
  • Interpreting Graphs – Ability to analyze and interpret data presented in graphical form, particularly line graphs.
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