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What is the importance of statistics in economics?

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Quick Answer

Statistics are a methodology necessary in the field of statistics and are used to collect, analyze and evaluate data. Economics depends heavily on the use of statistics.

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What is the importance of statistics in economics?
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Economics is defined as the study of how people behave with regard to the production and consumption of goods. As a social science, economics attempts to describe trends in consumer markets, such as wealth acquisition and transfer. There are two forms of economics:

  • Macroeconomics: analysis of large-scale economic activity, such as within a country or international market
  • Microeconomics: analysis of small-scale economic activity, such as between individuals and corporations

There are various themes studied within both forms of economics, including costs, production, consumption, and the rationales behind individual, corporate, national and international trade. In order to develop hypotheses around the various topic areas, economists make use of statistics and are able to compare information. Economic statistics involve quantitative data that describe either past or present trends. The data may be presented in various ways:

  • Time-related: to show trends and changes that occurred across a specific period of time, for example, unemployment rates or housing costs during a 10-year period
  • Cross-section: to show trends and changes within a specific period of time, for example, job statistics for current year college graduates

Economic statistical data sets include information about measurement, sample sizes, collection procedures and analysis processes. The data are often published for public use, such as through the United States Census or for private use, such as intra-company data used for decision-making.

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