What is the Importance of Statistics in Economics?

By Mandeep Kumar|Updated : September 6th, 2022

The system that deals with the collection, analysis, interpretation, and presentation of numerical data is called statistics. The importance of statistics in economics is as follows:

  • It is an indispensable tool that helps in understanding economic problems.
  • It helps in determining the qualitative and quantitative facts of an economic problem.
  • After identifying the problem, it is easy to formulate certain policies with the help of statistics to tackle it.
  • It helps in presenting the economic facts in a precise and definite form.
  • Statistical terms help in presenting economic facts in an exact manner.

What is Statistics?

The branch of mathematics and used in various disciplines such as accounting, economics, management, physics, finance, psychology, and sociology is called statistics. It helps in condensing mass data into a few numerical measures such as mean, variance, etc. It helps in summarizing data. It helps in determining

  • The situation after increasing or decreasing the price of the commodity.
  • The effect on the supply of commodities on changing the price.
  • The situation to the general price level when the government expenditure increases.

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  • Statics in economics is important to understand the economical problem, identify the qualitative and quantitative facts of an economic problem, formulate policies, etc.

  • The economic problems that can be analysed with the help of statistics are rising prices, growing population, unemployment, poverty, etc.

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