Question

The Government and policy makers use statistical tools to formulate suitable policies of economic development. Illustrate two examples.



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Answer 1

Statistics is useful in analysing economic problems such as; growing population, rising prices, unemployment, poverty etc. It can be explained with the following examples :

Example (i) : It can be ascertained easily by using statistical tools whether the policy of family planning is effective in checking the problem of everincreasing population in India.

Example (ii) : In the present time oil prices are rapidly increasing at global level. Therefore it is necessary to take serious action towards the problem that how much oil should be imported, based on statistical data. This quantity of import would depend on the domestic production of oil and also demand for oil in future.

Answer 2

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The statistical data is important for Government and policy makers to formulate suitable policies of economic development. It not only helps in analysing and evaluate the outcomes of the past policies but also assist them to take corrective measures and to formulate new policies accordingly.

It is clear from examples.

1. It can be ascertained by using statistical techniques whether the policy of family planning is effective in checking the problem of rapidly growing population.

2. In preparing annual Government budgets, previous data of Government expenditures and Government resources are taken into consideration for estimating the allocation of funds among various projects