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Chapter 5 · Class 11 Economics

Introduction (Statistics for Economics) — Important Questions

59 questions With answers CBSE format

SUMMARY: The chapter "Introduction" in Class 11 Economics provides an overview of the role and importance of statistics in the field of economics.
KEY TOPICS: definition of statistics, importance of statistics in economics, types of data, collection of data, presentation of data, statistical tools, limitations of statistics, scope of statistics in economics, uses of statistics in economic planning, role of statistics in policy formulation.

Previous chapter Introduction (Microeconomics) Next chapter Market Equilibrium (Microeconomics)
Multiple Choice Questions (MCQs) 15 questions
Q1 1 Mark

Statistics in the plural sense refers to:

AStatistical methods
BNumerical facts or aggregates
COnly primary data
DGovernment reports
Check answerHide answer
Correct answer: Option 2 — Numerical facts or aggregates
Q2 1 Mark

Who is regarded as the father of modern statistics?

AR. A. Fisher
BKarl Pearson
CFrancis Galton
DA. L. Bowley
Check answerHide answer
Correct answer: Option 1 — R. A. Fisher
Q3 1 Mark

Which of the following is NOT a limitation of statistics?

AIt deals only with quantitative data
BIt can be misused
CIt studies aggregates only
DIt simplifies complex data
Check answerHide answer
Correct answer: Option 4 — It simplifies complex data
Q4 1 Mark

Which of the following is a function of statistics in economics?

ASimplification of complex data
BComparison and measurement
CFormulation and testing of hypotheses
DAll of the above
Check answerHide answer
Correct answer: Option 4 — All of the above
Q5 1 Mark

Statistics is best described as:

AOnly a science
BOnly an art
CBoth a science and an art
DNeither a science nor an art
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Correct answer: Option 3 — Both a science and an art
Q6 1 Mark

Which of the following best defines 'Statistics' in the context of economics?

AA branch of mathematics dealing only with geometry
BThe science of collecting, organizing, presenting, analyzing and interpreting numerical data
CA method used exclusively for government census operations
DA tool used only for measuring industrial production
Check answerHide answer
Correct answer: Option 2 — The science of collecting, organizing, presenting, analyzing and interpreting numerical data
Q7 1 Mark

Which of the following is NOT a function of statistics in economics?

APresenting economic data in a simplified form
BHelping in economic planning and policy formulation
CReplacing the need for economic theories entirely
DEstablishing relationships between economic variables
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Correct answer: Option 3 — Replacing the need for economic theories entirely
Q8 1 Mark

Data that is collected for the first time by the investigator for a specific purpose is known as:

ASecondary data
BPublished data
CPrimary data
DProcessed data
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Correct answer: Option 3 — Primary data
Q9 1 Mark

Which of the following statements correctly describes a limitation of statistics?

AStatistics can study both qualitative and quantitative phenomena equally
BStatistical laws are exact and apply to every individual case
CStatistics deals only with aggregate facts and not individual observations
DStatistics can predict future events with complete certainty
Check answerHide answer
Correct answer: Option 3 — Statistics deals only with aggregate facts and not individual observations
Q10 1 Mark

In economic planning, statistics is primarily used to:

AEliminate the role of government in resource allocation
BProvide quantitative basis for formulating and evaluating economic policies
CReplace qualitative judgments in all economic decisions
DRestrict the scope of economic research to developed nations only
Check answerHide answer
Correct answer: Option 2 — Provide quantitative basis for formulating and evaluating economic policies
Q11 1 Mark

Which of the following is an example of secondary data?

AData collected through a personal interview conducted by a researcher
BData gathered through a questionnaire distributed by the investigator
CData published by the Reserve Bank of India in its annual report
DData collected through direct observation in the field
Check answerHide answer
Correct answer: Option 3 — Data published by the Reserve Bank of India in its annual report
Q12 1 Mark

The statement 'Statistics are like clay of which you can make a god or devil as you please' highlights which limitation of statistics?

AStatistics ignores qualitative aspects
BStatistics can be misused to draw misleading conclusions
CStatistics deals only with aggregate data
DStatistical results are always approximate
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Correct answer: Option 2 — Statistics can be misused to draw misleading conclusions
Q13 1 Mark

Which of the following tools is used in the presentation of statistical data?

ARegression analysis only
BTables, diagrams, and graphs
CIndex numbers only
DSampling methods only
Check answerHide answer
Correct answer: Option 2 — Tables, diagrams, and graphs
Q14 1 Mark

A researcher studying the relationship between income levels and consumer spending is using statistics to:

AEstablish a qualitative description of consumer behavior without data
BIdentify and measure the correlation between two economic variables
CProve that income has no effect on spending patterns
DCollect data that is irrelevant to economic policy
Check answerHide answer
Correct answer: Option 2 — Identify and measure the correlation between two economic variables
Q15 1 Mark

Which of the following correctly distinguishes between the two meanings of the word 'statistics'?

AIn singular form it refers to numerical data; in plural form it refers to statistical methods
BIn singular form it refers to statistical methods; in plural form it refers to numerical data
CBoth singular and plural forms refer only to the collection of numerical data
DBoth singular and plural forms refer only to statistical tools and techniques
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Correct answer: Option 2 — In singular form it refers to statistical methods; in plural form it refers to numerical data
Short Answer Questions 10 questions
Q16 3 Marks

Define statistics in both the singular and plural senses.

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In the singular sense, statistics refers to the science or methods of collecting, classifying, presenting, analysing and interpreting data. In the plural sense, it refers to numerical facts or aggregates collected systematically in a definite context (e.g., statistics of exports).
Q17 3 Marks

State any two limitations of statistics.

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(i) Statistics studies only quantitative aggregates — it ignores qualitative features and individual cases. (ii) Statistical results can be misused or misinterpreted when divorced from context, so the methods are only as reliable as the data and the analyst using them.
Q18 3 Marks

Distinguish between primary data and secondary data.

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Primary data are original data collected by the investigator for the first time for a specific purpose (e.g. a household survey). Secondary data have already been collected and processed by someone else (e.g. NSO reports, newspapers). Primary data are more reliable for the specific purpose; secondary data are cheaper and faster to use.
Q19 3 Marks

What is meant by 'statistics is both a science and an art'?

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It is a science because it uses a systematic body of methods and rules. It is an art because applying those methods requires skill and judgement — choosing the right tool, interpreting results in context, and communicating findings clearly.
Q20 3 Marks

State any two functions of statistics in economics.

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(i) Condensation — summarising large volumes of numerical data into measures like mean, median and index numbers. (ii) Formulation and testing of economic hypotheses and policies — e.g. testing the effect of a tax change on consumption using observed data.
Q21 3 Marks

Define statistics in the context of economics.

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Statistics refers to the collection, organisation, presentation, analysis, and interpretation of numerical data. In economics, it helps in understanding and analysing economic problems by providing quantitative facts and figures. It enables economists to draw meaningful conclusions from data.
Q22 3 Marks

Why is statistics considered important in economics?

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Statistics is important in economics because it helps in quantifying economic problems and making them easier to analyse. It provides tools to collect and interpret data related to production, consumption, prices, and income. Without statistics, economic analysis would remain vague and qualitative.
Q23 3 Marks

What is meant by the 'presentation of data' in statistics?

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Presentation of data refers to the systematic arrangement of collected data in a meaningful and understandable form. It can be done through tables, graphs, diagrams, or frequency distributions. Proper presentation makes data easier to read, compare, and interpret.
Q24 3 Marks

Explain any two uses of statistics in economic planning.

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First, statistics helps planners identify the current economic conditions of a country by analysing data on income, employment, and production. Second, it enables the government to set realistic targets and allocate resources efficiently by studying trends and patterns in economic data. Thus, statistics forms the backbone of effective economic planning.
Q25 3 Marks

How does statistics assist in policy formulation?

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Statistics provides factual and numerical evidence that helps policymakers understand the magnitude of economic problems such as poverty, unemployment, or inflation. By analysing statistical data, the government can design appropriate policies and evaluate their effectiveness over time. Without reliable statistics, policy decisions would lack a sound empirical basis.
Long Answer Questions 6 questions
Q26 6 Marks

Explain the scope and importance of statistics in the study of economics.

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Scope: Statistics enters every branch of economics — in microeconomics (consumer expenditure, firm output, factor prices), macroeconomics (GDP, inflation, employment), public finance (tax revenue, deficits), international trade (exports, BoP) and development (HDI, poverty ratios). Importance: (a) Condensation — large datasets reduced to summary measures. (b) Comparison — across regions, sectors, years. (c) Forecasting and projection — time-series analysis. (d) Testing economic theories — e.g. the law of demand via correlation between price and quantity demanded. (e) Formulation of policy — tax rates, subsidy budgets, RBI targets all depend on statistical estimates. Without statistics economics would be essentially a priori speculation.
Q27 6 Marks

Describe the main stages of a statistical investigation.

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(1) Definition of the problem — spell out the objective, the population of interest and the variables to be measured. (2) Collection of data — choose between census and sample, and between primary methods (observation, interview, questionnaire) and secondary sources. (3) Organisation of data — classify raw observations into class-intervals, prepare frequency distributions and tables. (4) Presentation — textual notes, tables and graphs (bars, pie, histograms, ogives). (5) Analysis — compute averages, dispersion, correlation, index numbers as the problem demands. (6) Interpretation and report — translate numerical results into economic meaning, note limitations, and communicate clearly. Each stage is only as good as the one before it.
Q28 6 Marks

Examine the principal limitations of statistics with examples.

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(1) Deals only with quantitative aggregates — intangible facts like happiness or honesty cannot be directly studied; they are approximated by proxies. (2) Averages can mislead — a rise in per-capita GDP may coexist with falling incomes for the bottom decile; one number hides distribution. (3) Results are true only on average — statistics cannot predict individual cases. (4) Can be misused — selective quoting, poorly constructed indices, or misleading graphs. (5) Requires skilled handling — wrong technique or dirty data ruin the conclusion. (6) Sampling error is always present in sample surveys. Recognising these limits is central to using statistics responsibly.
Q29 6 Marks

Compare 'statistics in singular' and 'statistics in plural' senses, with examples.

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Plural sense — statistics are numerical facts of a subject collected systematically, comparable with one another and affected by a multiplicity of causes. Example: 'the unemployment statistics of India during 2000-20'. Singular sense — statistics is the science / method of collecting, organising, presenting, analysing and interpreting such data. Example: 'a course in statistics'. The plural sense deals with data; the singular sense deals with the methodology. Both senses are complementary — good numerical facts require good method, and the method is justified only by the insight it extracts from the facts.
Q30 6 Marks

Discuss the characteristics of good statistical data.

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Good statistical data have the following characteristics: (i) Aggregate of facts — not a single observation. (ii) Numerically expressed — qualitative items must be quantified (e.g. literacy rate in %). (iii) Affected by a multiplicity of causes — not attributable to any one cause. (iv) Reasonably accurate — the data should be collected, compiled and analysed with care; small errors are acceptable. (v) Collected for a pre-determined purpose — randomly gathered numbers are not statistics. (vi) Comparable — collected in a uniform manner across units. (vii) Systematic — gathered with a clear plan. These properties ensure that the data, once analysed, yield meaningful and reliable conclusions.
Q31 6 Marks

Define statistics and explain its importance in the field of economics. How does statistics help economists in understanding economic phenomena?

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Statistics refers to the science of collecting, organizing, presenting, analyzing, and interpreting numerical data to assist in making better decisions. In economics, statistics plays a crucial role as it helps economists quantify economic phenomena that would otherwise be difficult to understand. For example, data on GDP, inflation, unemployment, and poverty levels are all expressed in numerical terms using statistical methods. Statistics helps economists identify patterns, trends, and relationships between different economic variables. It enables economists to test economic theories and hypotheses using real-world data. Without statistics, economics would remain largely theoretical and qualitative. Statistical tools such as averages, index numbers, and correlation help in summarizing large volumes of economic data into meaningful information, making it easier for policymakers and researchers to draw conclusions and make informed decisions.
Assertion–Reason Questions 8 questions
Q32 1 Mark

Assertion (A): Statistics in the singular sense refers to the science of methods of data handling.

Reason (R): In the singular sense, statistics denotes the systematic body of principles and techniques for collecting, analysing and interpreting data.

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Correct answer: Option 1 — Both A and R are true, and R is the correct explanation of A.
Q33 1 Mark

Assertion (A): Statistics studies aggregates of facts rather than isolated observations.

Reason (R): A single observation cannot by itself be compared or analysed in the probabilistic sense that statistics requires.

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Correct answer: Option 1 — Both A and R are true, and R is the correct explanation of A.
Q34 1 Mark

Assertion (A): Statistics is indispensable for formulating economic policy.

Reason (R): Policy decisions rely on quantitative estimates of current conditions and of the effect of proposed measures.

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Correct answer: Option 1 — Both A and R are true, and R is the correct explanation of A.
Q35 1 Mark

Assertion (A): Statistics can prove any proposition.

Reason (R): Statistical methods are tied to the accuracy and coverage of the underlying data; they can mislead if misused, but cannot prove arbitrary claims.

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Correct answer: Option 3 — A is true, but R is false.
Q36 1 Mark

Assertion (A): Statistics can be described as both a science and an art.

Reason (R): It is a science because its rules are systematic; it is an art because their correct application requires judgement and experience.

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Correct answer: Option 1 — Both A and R are true, and R is the correct explanation of A.
Q37 1 Mark

Assertion (A): Statistics is an indispensable tool for an economist.

Reason (R): Statistics helps economists to collect, present, and analyse numerical data related to economic problems.

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Correct answer: Option 1 — Both A and R are true, and R is the correct explanation of A.
Q38 1 Mark

Assertion (A): Data collected for the first time by the investigator is called secondary data.

Reason (R): Primary data is original data collected directly from the source for a specific purpose.

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Correct answer: Option 4 — A is false, but R is true.
Q39 1 Mark

Assertion (A): Statistics can be used to establish a definite cause-and-effect relationship between two variables.

Reason (R): Statistical methods only show the degree of association or correlation between variables and cannot prove causation.

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Correct answer: Option 3 — A is true, but R is false.
Statement-Based Questions 8 questions
Q40 1 Mark

Statement 1: Statistics in the plural sense refers to numerical aggregates of facts.

Statement 2: Statistics in the singular sense refers to the scientific method of handling data.

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Correct answer: Option 1 — Both statements are true.
Q41 1 Mark

Statement 1: Primary data are collected originally for a specific purpose.

Statement 2: Secondary data are always costlier than primary data.

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Correct answer: Option 3 — Only Statement 2 is true.
Q42 1 Mark

Statement 1: Statistics helps to condense large masses of numerical data.

Statement 2: Statistics is useful in the formulation and testing of economic hypotheses.

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Correct answer: Option 1 — Both statements are true.
Q43 1 Mark

Statement 1: Statistics simplifies complex data sets.

Statement 2: Statistics can be fully understood without any formal training.

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Correct answer: Option 3 — Only Statement 2 is true.
Q44 1 Mark

Statement 1: Statistics is useful for studying aggregate economic trends.

Statement 2: Statistics is equally useful for studying a single isolated observation.

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Correct answer: Option 3 — Only Statement 2 is true.
Q45 1 Mark

Statement 1: Statistics is defined as the science of collecting, organising, presenting, analysing and interpreting numerical data.

Statement 2: Statistics can only be used in natural sciences and has no relevance in economics.

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Correct answer: Option 2 — Only Statement 1 is true.
Q46 1 Mark

Statement 1: Primary data is collected directly from the original source by the investigator himself.

Statement 2: Secondary data is also collected directly from the original source by the investigator.

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Correct answer: Option 2 — Only Statement 1 is true.
Q47 1 Mark

Statement 1: Statistics helps economists in understanding and solving economic problems by providing quantitative data.

Statement 2: Statistical tools are used in economic planning and policy formulation.

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Correct answer: Option 1 — Both statements are true.
Case Study / Passage Questions 4 questions
Q48 3 Marks
The Ministry of Finance wants to evaluate the impact of a new food-subsidy scheme. It plans to compare consumer expenditure of poor households before and after the scheme. Without systematic statistical evidence the discussion would rely on anecdote and press reports.
  1. Statistics in the singular sense refers to:
    AOnly data
    BOnly methods for collecting and analysing data
    COnly opinions
    DOnly forecasts
  2. Statistics usually studies:
    AIndividual households
    BAggregates of facts
    CSingle observations
    DSmall groups only
  3. Explain in your own words how statistics helps in evaluating such a policy.
Show answersHide answers
1. Option 2 — Only methods for collecting and analysing data
2. Option 2 — Aggregates of facts
3. Statistics helps quantify the 'before' and 'after' situations through representative samples, gives comparable aggregates such as mean expenditure, and tests whether observed differences are statistically significant. It therefore makes the evaluation objective and reproducible rather than anecdotal.
Q49 3 Marks
Researcher A conducts a door-to-door survey of 300 households to study household expenditure. Researcher B uses the latest NSS Consumer Expenditure report to study the same issue. Both prepare reports; A's is more expensive and takes longer; B's is quicker but restricted to the questions the NSS already asked.
  1. The data used by Researcher A is an example of:
    APrimary data
    BSecondary data
    CTertiary data
    DQualitative data
  2. The data used by Researcher B is an example of:
    APrimary data
    BSecondary data
    CExperimental data
    DQualitative data
  3. Compare primary and secondary data in terms of reliability and cost.
Show answersHide answers
1. Option 1 — Primary data
2. Option 2 — Secondary data
3. Primary data are original and tailored to the specific question, so they are usually more reliable for that question — but they are costly and slow to collect. Secondary data are cheaper and quicker but limited to what was originally asked. In practice researchers use secondary data when the questions match and shift to primary only when secondary is insufficient.
Q50 3 Marks
A newspaper article states that 'India's per-capita income rose by 6% last year, so every Indian is better off by 6%'. The statement ignores the fact that the rise in per-capita income was distributed unevenly across income groups and regions.
  1. Which of the following is the main problem with the newspaper's statement?
    AStatistical methods were used correctly
    BAverages can hide important distributional differences
    CPer-capita income is always inaccurate
    DAll Indians gained equally
  2. Statistics typically reveals:
    AIndividual cases
    BAggregate averages
    CQualitative details
    DTime trends
  3. Explain why a headline average can mislead in economic reporting.
Show answersHide answers
1. Option 2 — Averages can hide important distributional differences
2. Option 2 — Aggregate averages
3. A rise in per-capita (average) income can coexist with stagnant or falling incomes for many groups if gains are concentrated. Responsible interpretation requires looking at distribution (Lorenz curve), dispersion measures and sub-group averages rather than a single headline figure.
Q51 4 Marks
Statistics plays a vital role in economics. It helps economists collect, organise, present, analyse, and interpret numerical data related to economic phenomena. Without statistics, economic planning and policy formulation would be impossible. For example, the government uses statistical data to understand the level of poverty, unemployment, and inflation in the country. Statistics helps in comparing economic conditions across different regions and time periods. It also assists in forecasting future economic trends. The Central Statistical Organisation (CSO) and National Sample Survey Organisation (NSSO) are key bodies in India that collect and publish statistical data. Statistics thus acts as a backbone for economic analysis and decision-making.
  1. Which of the following is NOT a function of statistics in economics?
    ACollection of data
    BInterpretation of data
    CManufacturing of goods
    DPresentation of data
  2. Which organisation in India is responsible for collecting and publishing national statistical data?
    ARBI
    BSEBI
    CCSO
    DNABARD
  3. Why is statistics considered the backbone of economic analysis?
  4. Statistics helps in forecasting future economic trends. True or False? Justify your answer.
Show answersHide answers
1. Option 3 — Manufacturing of goods
2. Option 3 — CSO
3. Statistics is considered the backbone of economic analysis because it helps in collecting, organising, presenting, analysing, and interpreting numerical data. It enables economists and governments to understand economic phenomena like poverty, unemployment, and inflation, compare conditions across regions and time, and forecast future trends, making informed planning and policy formulation possible.
4. True. Statistics uses past and present data to identify patterns and trends, which helps economists and policymakers forecast future economic conditions such as GDP growth, inflation rates, and employment levels, enabling better planning and decision-making.
Table-Based Questions 4 questions
Q52 3 Marks

Study the comparison of primary and secondary data and answer:

CharacteristicPrimary dataSecondary data
SourceCollected originally by the researcherPublished by another agency
CostHighLow
TimeSlowFast
Relevance to research questionVery highDepends
  1. Which type of data is typically more expensive to obtain?
    APrimary data
    BSecondary data
    CBoth equal
    DNeither
  2. Which type of data is typically faster to obtain?
    APrimary data
    BSecondary data
    CBoth equal
    DNeither
  3. Why do researchers usually consult secondary data before collecting primary data?
Show answersHide answers
1. Option 1 — Primary data
2. Option 2 — Secondary data
3. Researchers usually start with secondary data to understand what is already known and to pin down definitions and summary facts. Primary data collection is undertaken only where secondary sources do not answer the specific question at hand.
Q53 3 Marks

Study the subject matter of statistics and answer:

Function of statisticsExample in economics
CollectionHousehold consumption survey
PresentationGDP growth bar chart
AnalysisComputing mean income, standard deviation
InterpretationIdentifying rising inequality
  1. Which function is best illustrated by a household consumption survey?
    ACollection
    BPresentation
    CAnalysis
    DInterpretation
  2. Which function is illustrated by a GDP growth bar chart?
    ACollection
    BPresentation
    CAnalysis
    DInterpretation
  3. What does the table show about the scope of statistics?
Show answersHide answers
1. Option 1 — Collection
2. Option 2 — Presentation
3. Statistics is more than just crunching numbers — it covers the whole cycle from collection through interpretation. Only by completing all four stages can an analyst turn raw observations into an economic insight.
Q54 6 Marks

Observe the following table showing the uses of statistics in different areas of economics and answer the questions below:

Area of EconomicsUse of StatisticsExample
Economic PlanningForecasting future trendsGDP growth projection
Policy FormulationData-driven decision makingTax rate determination
Market AnalysisDemand and supply estimationPrice index calculation
National IncomeMeasurement and comparisonPer capita income data
Q55 6 Marks

The following table shows different types of data used in economics. Study the table carefully and answer the questions:

Type of DataDefinitionExample
Primary DataCollected directly by the investigator for the first timeSurvey of farmers' income
Secondary DataData already collected and used by someone elseCensus data published by government
Quantitative DataData expressed in numerical formProduction figures in tonnes
Qualitative DataData expressed in descriptive formConsumer satisfaction levels
Picture-Based Questions 4 questions
Q56 3 Marks

Study the sources of official statistics in India and answer:

Introduction (Statistics for Economics) figure
  1. The largest share of official statistics in India is published by:
    ANSO
    BRBI
    CCensus of India
    DMinistry of Commerce
  2. The Census of India is conducted:
    AOnce a year
    BEvery quarter
    COnce in 10 years
    DEvery month
  3. Why does India have multiple agencies producing official statistics?
Show answersHide answers
1. Option 1 — NSO
2. Option 3 — Once in 10 years
3. Multiple agencies avoid duplication and specialise by domain — NSO handles national accounts and surveys, RBI handles money and finance, the Census handles demographic enumeration. Each uses standardised methods and publishes data that researchers can combine for a comprehensive economic picture.
Q57 18 Marks

Based on the given diagram, answer the following:

Introduction (Statistics for Economics) figure
  1. Which of the following is a method of collecting Primary Data?
    APublished Sources
    BUnpublished Sources
    CDirect Personal Interview
    DGovernment Reports
  2. Define Primary Data.
  3. Which of the following is NOT a source of Secondary Data?
    APublished Sources
    BUnpublished Sources
    CQuestionnaire Method
    DGovernment Publications
  4. State one advantage of using Secondary Data over Primary Data.
  5. Which of the following best describes the role of statistics in economic planning?
    AIt makes data more complex and detailed
    BIt provides numerical data to help planners make informed decisions
    CIt eliminates the need for government intervention
    DIt only deals with past economic data
  6. How does statistics help in policy formulation? Explain with an example.
  7. Which function of statistics involves finding the connection between two or more economic variables?
    ASimplifies Complex Data
    BPresents Facts in Definite Form
    CEstablishes Relationships
    DHelps in Comparison
  8. Why is it important for statistics to present facts in a definite form?
  9. Which of the following is a limitation of statistics?
    AIt helps in economic planning
    BIt studies numerical facts
    CIt does not study individuals
    DIt is used in research
  10. Explain with an example how statistics can be misused.
  11. According to the diagram, which of the following correctly describes the scope of statistics?
    AStatistics can study qualitative phenomena directly
    BStatistics is used in economics, business, and planning
    CStatistics gives exact results for every individual
    DStatistics does not require any expertise
  12. Why is it said that 'statistical results are true only on average'? Give an example.
  13. What is the key difference between Primary Data and Secondary Data?
  14. Which of the following is an example of a Published Secondary Source?
    APersonal diary of a researcher
    BCensus of India reports
    CField survey notes
    DDirect observation records
  15. Which use of statistics helps the government decide on economic policies such as taxation and subsidies?
    ASimplifies Complex Data
    BHelps in Comparison
    CHelps in Policy Formulation
    DPresents Facts in Definite Form
  16. Explain how statistics helps in economic planning with an example.
  17. Which of the following best describes the use of statistics in 'Forecasting'?
    ARecording past economic events
    BPredicting future trends based on past data
    CComparing data of two countries
    DSimplifying large tables of data
  18. Why is it important for statistics to present facts in a definite numerical form?
  19. Which limitation of statistics means that it cannot measure qualitative aspects like honesty or intelligence?
    ADoes not Study Individuals
    BResults are True only on Average
    CStudies only Quantitative Facts
    DCan be Misused
  20. Explain with an example how statistics can be misused to give misleading conclusions.
  21. What does the limitation 'Does not Study Individuals' mean in the context of statistics?
    AStatistics ignores group behaviour
    BStatistics deals with aggregates and not individual data points in isolation
    CStatistics cannot be applied to large populations
    DStatistics only studies government data
  22. Why is homogeneity of data necessary for statistical analysis? What happens if data is not homogeneous?
Show answersHide answers
1. Option 3 — Direct Personal Interview
2. Primary Data is the data collected for the first time by the investigator himself for a specific purpose. It is original in nature and has not been used before.
3. Option 3 — Questionnaire Method
4. Secondary Data is less time-consuming and less expensive to collect as it has already been gathered by someone else, making it more convenient for the researcher.
5. Option 2 — It provides numerical data to help planners make informed decisions
6. Statistics helps in policy formulation by providing quantitative evidence on economic issues. For example, data on unemployment rates helps the government design employment generation schemes like MGNREGA.
7. Option 3 — Establishes Relationships
8. Presenting facts in a definite numerical form makes them precise, clear, and convincing. Vague statements like 'many people are poor' are less useful than specific data like '22% of the population lives below the poverty line', which aids in better analysis and decision-making.
9. Option 3 — It does not study individuals
10. Statistics can be misused by presenting data selectively to support a biased conclusion. For example, a company may advertise that its product is used by '9 out of 10 doctors' without revealing that the survey was conducted on only 10 doctors, making the result misleading.
11. Option 2 — Statistics is used in economics, business, and planning
12. Statistical results represent the average tendency of a group and may not apply to every individual. For example, if the average income of a village is ₹10,000 per month, it does not mean every person earns exactly ₹10,000 — some may earn much more and others much less. Thus, statistical conclusions are approximate and not universally applicable.
13. Primary Data is collected for the first time by the investigator himself for a specific purpose, whereas Secondary Data is data that has already been collected and published or unpublished by some other agency or person.
14. Option 2 — Census of India reports
15. Option 3 — Helps in Policy Formulation
16. Statistics helps in economic planning by providing quantitative data about resources, production, consumption, and population. For example, the government uses statistical data on poverty levels and income distribution to plan welfare schemes and allocate budgets effectively.
17. Option 2 — Predicting future trends based on past data
18. Presenting facts in a definite numerical form makes information precise, objective, and verifiable. Vague statements like 'many people are poor' are less useful than specific data like '22% of India's population lives below the poverty line', which allows for accurate analysis and decision-making.
19. Option 3 — Studies only Quantitative Facts
20. Statistics can be misused by selectively presenting data to support a biased conclusion. For example, if a company's profit rose from Rs. 1 lakh to Rs. 2 lakh, it could claim a '100% increase in profit', which sounds impressive but may hide the fact that the absolute profit is still very small. Such selective use of data misleads the audience.
21. Option 2 — Statistics deals with aggregates and not individual data points in isolation
22. Homogeneity of data is necessary because statistical comparisons are valid only when the data being compared belongs to the same category or type. If data is not homogeneous (e.g., comparing the wages of doctors with those of daily wage labourers), the results will be misleading and conclusions drawn will be incorrect and unreliable.
Q58 4 Marks

Based on the given chart showing the distribution of data collection methods used in an economic survey, answer the following:

Introduction (Statistics for Economics) figure
  1. Which method of primary data collection was used most frequently in the survey?
    AQuestionnaire by Mail
    BIndirect Oral Interview
    CDirect Personal Interview
    DTelephone Interview
  2. What percentage of the survey used either 'Indirect Oral Interview' or 'Telephone Interview'?
    A25%
    B30%
    C35%
    D40%
  3. State one limitation of the 'Questionnaire by Mail' method of data collection.
  4. Why is Direct Personal Interview considered a reliable method of primary data collection?
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1. Option 3 — Direct Personal Interview
2. Option 3 — 35%
3. One limitation of the Questionnaire by Mail method is that the response rate is often very low, as many respondents may not return the filled questionnaire. Additionally, it requires the respondents to be literate, limiting its use in areas with low literacy rates.
4. Direct Personal Interview is considered reliable because the investigator personally meets the respondent, can clarify doubts, observe non-verbal cues, and ensure accurate and complete responses. This reduces the chances of misinterpretation and increases the quality of data collected.
Q59 4 Marks

Based on the given bar chart showing the importance of statistical tools used in economic analysis, answer the following:

Introduction (Statistics for Economics) figure
  1. Which statistical tool was used most frequently in economic analysis as shown in the chart?
    ABar Diagrams
    BCorrelation
    CTables
    DPie Charts
  2. What is the difference in frequency of use between 'Measures of Central Tendency' and 'Correlation'?
    A15
    B20
    C25
    D30
  3. Why are statistical tools important in the study of economics? Mention any two tools and their uses.
  4. Based on the chart, which two tools have the closest frequency of use, and what does this suggest about their role in economic analysis?
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1. Option 3 — Tables
2. Option 3 — 25
3. Statistical tools are important in economics because they help organise, present, and analyse economic data effectively. (1) Tables: Help in organising large amounts of data in a systematic and readable format, making comparison easy. (2) Measures of Central Tendency (e.g., Mean): Help in summarising a large dataset into a single representative value, useful for comparing economic indicators like average income or average price levels.
4. Bar Diagrams (65) and Measures of Central Tendency (70) have the closest frequency of use. This suggests that both tools are almost equally important in economic analysis — Bar Diagrams are widely used for visual presentation of data, while Measures of Central Tendency are used for summarising and comparing economic data, making both indispensable in economic studies.
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