What Happens When Two Variables Have a Negative Correlation

question 224

Multiple Choice

What happens when two variables have a negative correlation?

• A) They tend to move in opposite directions.
• B) They tend to move in the same direction.
• C) One variable will move while the other remains constant.
• D) The movement of the two variables is unpredictable.

---

Definitions:

Oil Embargo

An official ban on the trade of oil with a particular country or countries, often imposed by one or more countries as a form of economic sanction.

OPEC Countries

Member countries of the Organization of the Petroleum Exporting Countries, an intergovernmental organization that coordinates petroleum policies among its members to secure fair and stable oil prices.

Aggregate Supply Curve

A graphical representation that shows the relationship between the overall price level in an economy and the total output produced by firms.

Potential Output

The maximum amount of goods and services an economy can produce when it is most efficiently utilizing all of its resources.