INTRODUCTION

BY SHUBHRA SHARMA
 • ADAM SMITH IS FATHER OF ECONOMICS
• ECONOMICS IS ALL ABOUT MONEY
• ECONOMICS MEAN DEALING WITH SCARCE THINGS VERY OPTIMALLY
• IT IS FULL UTILISATION OF SCARCE RESOURCES WHICH HAVE MONETARY
RELATION
• IT DOESN’T DEAL WITH NATURAL RESOURCES WHICH ARE FREE GIFT OF
NATURE AS SUNLIGHT, WATER, ETC.
• THERE ARE TWO TYPES OF ACTIVITIES –
1. ECONOMIC ACTIVITIES – THE ACTIVITIES WHICH DEALS WITH MONEY
SUCH AS CONSUMPTION, PRODUCTION, EXCHANGE, DISTRIBUTION AND
INVESTMENT
2. NON ECONOMIC ACTIVITIES – ACTIVITIES WHICH ARE NOT RELATED WITH
MONEY, NO MONEY INVOLVEMENT IS THERE SUCH AS PARENTAL
ACTIVITIES, RELIGIOUS ACTIVITIES, ETC
 • THERE ARE TWO BRANCHES OF ECONOMICS –
1. MICROECONOMICS – IT MEANS SMALL, i.e.,IT DEALS WITH SINGLE UNITS
OF THE ECONOMY, SUCH AS INDIVIDUAL INCOME, INDIVIDUAL FIRM AND
ITS DECISION, INDIVIDUAL DEMAND AND SUPPLY
2. MACROECONOMICS – IT MEANS LARGE, i.e., IT DEALS WITH THE WHOLE
ECONOMY, SUCH AS, AGGREGATE DEMAND, AGGREGATE SUPPLY, NATIONAL
INCOME, ETC.
• AS A SUBJECT ECONOMICS IS BOTH SCIENCE AND ART
• AS ART IT TELLS US ABOUT SKILL OF UTILIZATION, OPTIMUM UTILIZATION OF
GIVEN RESOURCES.
• IT ALSO TELLS US ABOUT THE ART OF USING SCARCE RESOURCES FOR
SATISFACTION OF UNLIMITED WANTS.
• AS SCIENCE, IT IS BASED ON CAUSE AND EFFECT RELATIONSHIP, EXPERIMENTS
AND OBSERVATIONS, TESTING THE HYPOTHESIS
• ECONOMICS IS BOTH POSITIVE AND NORMATIVE SCIENCE
• AS POSITIVE SCIENCE IT DEALS WITH FACTS
• AS NORMATIVE SCIENCE IT IS SUGGESTIVE IN NATURE i.e., IT GAVE
SUGGESTIONS, SOLUTIONS AND REMEDIES
DEFINITION OF ECONOMICS –
IT IS THE SCIENCE WHICH DEALS WITH HUMAN BEHAVIOUR IN RELATION TO
UNLIMITED WANTS, LIMITED MEANS HAVING ALTERNATIVE USES. - ROBBINS
• STATISTICS IS THE SCIENCE OF KINGS
• GOTTFRIED ASCHEN WALL IS FATHER OF STATISTICS
• STATISTICS IS ALL ABOUT DATA
• IT DOESN’T DEALS WITH QUALITATIVE FACTS, RATHER IT DEALS WITH
VARIABLES
• STATISTICS IS DEFINED IN SINGULAR AND PLURAL SENSE
• IN PLURAL SENSE STATISTICS IS DEFINED BY HORACE SECRIST
• IN THIS DEFINITION FEATURES OF STATISTICS ARE EXPLAINED
• IN SINGULAR SENSE DEFINITION, DIFFERENT STATISTICAL METHODS ARE
FOCUSSED
• IN THIS DEFINITION THE METHODS OF COLLECTION, CLASSIFICATION,
PRESENTATION, ANALYSIS AND INTERPRETATION ARE FOCUSSED.
 • FEATURES OF STATISTICS –
1. IT IS AGGREGATE OF FACTS
2. IT IS NUMERICALLY EXPRESSED
3. IT IS AFFECTED BY MULTIPLICITY OF CAUSES
4. THERE SHOULD BE REASONABLE STANDARD OF ACCURACY
5. THE DATA SHOULD BE MUTUALLY RELATED AND COMPARABLE
6. DATA IS COLLECTED FOR PRE DETERMINED PURPOSE BASED ON
ESTIMATION
7. COLLECTED IN SYSTEMATIC MANNER
 • STATISTICAL METHODS – SINGULAR DEFINITION
1. COLLECTION OF DATA BY CENSUS OR SAMPLE METHOD
2. ORGANIZATION OF DATA BY CLASSIFICATION AND ARRANGING THE DATA
3. PRESENTATION OF DATA BY TABLES, GRAPHS AND DIAGRAMS
4. ANNALYSIS OF DATA BY AVERAGES, CORRELATION, DISPERSION
5. INTERPRETATION OF DATA BY EXPLAINING THE DEGREE OF
RELATIONSHIPS BETWEEN DIFFERENT VARIABLES
NATURE OF STATISTICS –
• STATISTICS IS BOTH SCIENCE AND ART
• AS SCIENCE IT DEALS WITH NUMERICAL DATA IN A SCIENTIFIC MANNER
• AS AN ART IT RELATES THE QUANTITATIVE DATA WITH REAL LIFE
PROBLEMS
SUBJECT MATTER OF STATISTICS –
• IT HAS TWO COMPONENTS
1. DESCRIPTIVE STATISTICS – IT RELATES TO THE USE OF STATISTICAL
METHODS SUCH AS, CALCULATIONS OF AVERAGES, DISPERSION, ETC
2. INFERENTIAL STATISTICS – IT RELATES TO SUCH METHODS BY WHICH
CONCLUSIONS ARE DRAWN ON THE BASIS OF GIVEN SAMPLE
IMPORTANCE OF STATISTICS –
1. IT EXPRESSES THE ECONOMIC PROBLEMS QUANTITATIVELY
2. IT MAKES INTER-SECTORAL AND INTER-TEMPORAL COMPARISONS
POSSIBLE
3. IT HELPS IN WORKING OUT CAUSE AND EFFECT RELATIONSHIPS
4. IT HELPS IN CONSTRUCTION OF ECONOMIC THEORIES OR ECONOMIC
MODELS
5. IT HELPS N ECONOMIC FORECASTING
6. HELPFUL IN POLICY FORMULATION
7. IT BRINGS ECONOMIC EQUILIBRIUM
LIMITATIONS OF STATISTICS –
1. STUDIES ONLY NUMERICAL FACTS
2. IT STUDIES ONLY THE AGGREGATES OF QUANTITATIVE FACTS
3. IT IS APPLICABLE ONLY WHEN DATA IS HOMOGENOUS
4. RESULTS ARE BASED ON AVERAGES, LACKS ACCURACY
5. RESULTS MAY PROVE WRONG WITHOUT REFERENCE
6. CAN BE USED ONLY BY EXPERTS
7. IT IS PRONE TO MISUSE DUE TO BIASEDNESS, FALSE INTERPRETATION
AND MENTAL STATE OF LAYMAN
THANKYOU!