How does the application of econometrics to economics justify economic decisions for an organization?
November 14, 2020 | Education|
Econometrics is used in economics to validate economic decisions for an organization. Economic theory without measurement or calculation is of only limited value in analyzing current economic problems. For example, if an organization wants to know its future sales prospects, it can collect data from previous years using techniques such as correlation analysis and probability distribution. In this way, he can find the relationship between various variables and sales. Once an organization understands the variable affecting sales, it is better prepared to mitigate the factors causing the decline in sales and to maximize the factors that cause the increase in sales.
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