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.

Answer: (A)

Verified step by step guidance

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.
2. 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.
3. 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.
4. This positive association can be represented mathematically by a positive correlation coefficient or a positive slope in a linear relationship between the two variables.
5. Therefore, the statement 'As one variable increases, the other variable also increases' correctly describes a positive association between two variables in positive analysis.