Arizona State University (ASU) ECN221 Business Statistics Exam 2 Practice

The correct answer is indeed related to the process of making estimations about a population based on sample data. Inferential statistics encompasses methods that allow researchers to make inferences or generalizations about a larger population from a smaller subset of data—this subset is known as a sample.

This branch of statistics is crucial because, in many cases, it is impractical or impossible to collect data from an entire population. Instead, inferential statistics utilizes sample data to make predictions, test hypotheses, and derive estimates, including calculating confidence intervals or conducting hypothesis tests about population parameters.

Point estimation, while related, refers specifically to estimating a single value of a population parameter based on sample data, such as using the sample mean to estimate the population mean. On the other hand, descriptive statistics involves summarizing and describing the characteristics of a data set without making inferences about a population. Lastly, predictive analytics typically focuses on using data to predict future outcomes rather than estimating parameters. Thus, inferential statistics is the most comprehensive answer in the context of estimating population parameters.