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Correlation — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsCorrelation4 Marks
Question
Scatter diagram studies correlation between two variables but it does not measure the precise extent of correlation. In the context of above statement explain the advantages and disadvantages of scatter diagram.
✓

Answer

In the context to the above statement the main advantages of scatter diagram are:
  1. It is a simple and a non-mathematical method of studying correlation between two variables.
  2. It can be easily understood and interpreted.
  3. It is not influenced by the size of extreme values.
In the context to the above statement the main disadvantages of scatter diagram are:
  1. It is only a qualitative expression rather than a quantitative expression.
  2. It gives only a broad and rough idea of the degree and nature of correlation between two variables.
  3. This method does not indicate the exact numerical value of correlation.

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