Q.State any four functions (importance) of statistics in economics, and mention two of its limitations.

Statistics helps an economist grasp, compare and use numerical facts, though it also has genuine, well-recognised limits.

Four functions (importance) of statistics in economics:

1. It presents economic facts in a precise, definite numerical form rather than as vague general impressions.
2. It condenses a large, unwieldy mass of raw data into a few meaningful figures — an average, a percentage, or a single diagram — that can be grasped at a glance.
3. It facilitates comparison between two time periods, two regions, or two policies, through averages, diagrams and index numbers.
4. It helps formulate, test, and forecast economic theories, policies, and future trends, since sound planning and budgeting both rest on a numerical foundation built from past data.

Two limitations of statistics:

1. It deals only with facts that can be expressed numerically — qualitative aspects of economic life (such as consumer satisfaction or the political acceptability of a policy) fall outside its direct reach. …

Listing 'statistics helps in decision-making' as a function without explaining HOW (through condensation, comparison, or forecasting) loses marks in a full-length BIEAP answer, since the explanation o …