4433 significant relationship between inflation and

Info icon This preview shows pages 3–6. Sign up to view the full content.

4.4.3.3 Significant relationship between inflation and unemployment rate. Significance level=1% Let β 3 =Unemployment rate 1. H 0 : β 3 =0 H 1 : β 3 ≠0 2. Significant level: α=1% 3. Critical value: t α/2,n-k-1 = t 0.01/2,30-4-1= ±2.787 4. Decision rule: Reject H 0 if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -2.0851 6. Decision: Reject H 0. The test statistic (-2.0851) is larger than the lower critical value (-2.787). 7. Conclusion: We have enough evidence to conclude that β 3 ≠0. Unemployment rate is significantly related to inflation. Significance level=5% Let β 3 =Unemployment rate 1. H 0 : β 3 =0
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

H 1 : β 3 ≠0 2. Significant level: α=5% 3. Critical value: t α/2,n-k-1 = t 0.05/2,30-4-1= ±2.060 4. Decision rule: Reject H 0 if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -2.0851 6. Decision: Reject H 0. The test statistic (-2.0851) is smaller than the lower critical value (- 2.060). 7. Conclusion: We have enough evidence to conclude that β 3 ≠0. Unemployment rate is significantly related to inflation. Significance level=10% Let β 3 =Unemployment rate 1. H 0 : β 3 =0 H 1 : β 3 ≠0 2. Significant level: α=10% 3. Critical value: t α/2,n-k-1 = t 0.10/2,30-4-1= ±1.708 4. Decision rule: Reject H 0 if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -2.0851 6. Decision: Reject H 0. The test statistic (-2.0851) is smaller than the lower critical value (- 1.708). 7. Conclusion: We have enough evidence to conclude that β 3 ≠0. Unemployment rate is significantly related to inflation. 4.4.3.4 Significant relationship between inflation and interest rate. Significance level=1% Let β 4 =Interest rate 1. H 0 : β 4 =0 H 1 : β 4 ≠0 2. Significant level: α=1% 3. Critical value: t α/2,n-k-1 = t 0.01/2,30-4-1= ±2.787
Image of page 4
4. Decision rule: Reject H 0
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 6
This is the end of the preview. Sign up to access the rest of the document.
  • Summer '17
  • ms lau
  • Inflation, 1%, 4.4.3.2, 4.4.3.1, 4.4.3.3, 4.4.3.4

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern