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CA Foundation · Quantitative Aptitude · Correlation and Regression

Which of the following pairs of variables would most likely show a negative correlation?

Price of a commodity and quantity demanded show negative correlation because, other things being equal, a rise in price reduces the quantity demanded. Income and spending, rainfall and output, and study hours and marks all usually move in the same direction, so they are positively correlated.

  1. AHousehold income and household expenditure on consumer goods
  2. BPrice of a commodity and quantity demanded, other factors remaining constantCorrect
  3. CRainfall and agricultural output in a rain-fed region
  4. DNumber of hours studied and marks scored in an examination

Explanation

By the law of demand, when the price of a commodity rises, quantity demanded falls, so the two move in opposite directions. The other three pairs normally move in the same direction and so show positive correlation.

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