If rxy is positive the relation between X and Y is of the type
(a) when Y increases X increases
(b) when Y decreases X increases
(c) when Y increases X does not change
(a) If r is positive the two variables move in the same direction. e.g., when the price of coffee rises, the demand for tea also rises as coffee
is a substitute for tea. Therefore, the r between the price of coffee and demand for tea will be positive.