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JAMB Economics 2012 Question 4

Question 4

Tools of Economic Analysis

The sign of the slope of a graph in economic analysis is important because it

  1. A.shows whether a good is normal or inferior
  2. B.shows the relationship between variables
  3. C.reveals the magnitude of the change between variables
  4. D.helps to determine the unit of measurement of variables.
Show the answer and explanation

Answer: B (shows the relationship between variables)

Explanation

A positive slope shows the variables move in the same direction; a negative slope shows they move in opposite directions.