In the context of positive analysis, what does it mean to say that two variables are positively associated?
A
As one variable increases, the other variable also increases.
B
The variables have no relationship with each other.
C
As one variable increases, the other variable decreases.
D
Both variables remain constant regardless of changes in either.
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1
Understand that positive analysis in economics deals with objective and testable statements about how the world works, focusing on cause-and-effect relationships without value judgments.
Recognize that when two variables are said to be positively associated, it means there is a relationship where changes in one variable correspond to changes in the other variable in the same direction.
Formally, if variable X increases and variable Y also increases, or if X decreases and Y also decreases, then X and Y are positively associated.
This positive association can be represented mathematically by a positive correlation coefficient or a positive slope in a linear relationship between the two variables.
Therefore, the statement 'As one variable increases, the other variable also increases' correctly describes a positive association between two variables in positive analysis.