Question: Consider the two following scenarios:
a. The number of new workers hired per week in your county has a high positive correlation with the average weekly temperature. Can you conclude that an increase in temperature causes an increase in the number of new hires? Discuss.
b. Suppose the stock price and the common dividends declared for a certain company have a high positive correlation. Are you safe in concluding on the basis of the correlation coefficient that an increase in the common dividends declared causes an increase in the stock price? Present other reasons than the correlation coefficient that might lead you to conclude that an increase in common dividends declared causes an increase in the stock price.