Importance and Distrust of Statistics

Introduction

Statistics is an inevitable tool for an economist to analyse various economic problems. Statistics is important for the study of consumption, production, exchange, and distribution and for planned development. The limitations of statistics are

It is not useful for individual cases.

It ignores qualitative aspects.

It deals with average only.

Improper use of statistics can be dangerous.

It is only a mean, not an end.

It do not distinguish between cause and effect and

Its results are not always dependable

The distrusts of statistics are:

Figures may be incomplete, inaccurate and deliberately manipulated.

Statistics can prove whatever it wants and

Statistics are tissues of falsehood

The distrust of statistics can be removed by Self control, being used by experts, considering the limitations of statistics in mind.

Statistics is both a science and an art. As a science statistical methods are generally systematic and based on fundamental ideas and processes. It also works as a base for all other sciences. As an art it explores the merits and demerits, guides about the means to achieve the objective.

Analysis of the statistical data requires the study in two ways:

One is empirical analysis: It implies the study of correlation between different variables.

The second is quantitative analysis: It implies the study of statistics by using the techniques such as census, sample surveys and drawing conclusions on their basis.

The reasons for empirical and qualitative analysis of statistical data are:

To study the nature of problem

To study nature of variables

To formulate economic policies

To enhance knowledge

For budgetary analysis

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  • Q1

    We want to know how the producer chooses what to produce for the market given costs and prices. This is the study of

    Marks:1
    Answer:

    production

    Explanation:

    We want to know how the producer chooses what to produce for the market given costs and prices. This is the study of Production.

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  • Q2

    The study of consumption deals with

    Marks:1
    Answer:

    consumer decision

    Explanation:

    The study of consumption deals with the consumer decisions like how the consumer decides, given his income and many alternative goods to choose from.

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  • Q3

    Intelligence is an example of

    Marks:1
    Answer:

    Qualitative data

    Explanation:

    Intelligence, beauty, etc. are examples of qualitative facts.

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  • Q4

    When economic facts are expressed in statistical terms, they become

    Marks:1
    Answer:

    exact

    Explanation:

    Facts become exact when they are expressed in statistical terms. Exact facts are more convincing than statements.

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  • Q5

    Statistics is a/an

    Marks:1
    Answer:

    both science and art

    Explanation:

    Statistics is both science and art. Economics is a science because it is a systematic study of economic activities of human beings. It is an art because it implies practical application of knowledge with a view to achieve some specific objectives.

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