Question

What is the ‘cause effect’ relationship of economics?

Answer 1

Explanation:

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Definition of Cause and Effect

Think about when you woke up today. In all likelihood, you were probably woken up by the sound of an alarm clock. The loud sound of the alarm was the cause. Without the alarm, you probably would have overslept. In this scenario, the alarm had the effect of you waking up at a certain time. This is what we mean by cause and effect.

A cause-effect relationship is a relationship in which one event (the cause) makes another event happen (the effect). One cause can have several effects. For example, let's say you were conducting an experiment using regular high school students with no athletic ability. The purpose of our experiment is to see if becoming an all-star athlete would increase their attractiveness and popularity ratings among other high school students.

Suppose that your results showed that not only did the students view the all-star athletes as more attractive and popular, but the self-confidence of the athletes also improved. Here we see that one cause (having the status of an all-star athlete) has two effects (increased self-confidence and higher attractiveness ratings among other students).