RM chap4.docx

# 7 conclusion we have enough evidence to conclude that

• 6

This preview shows pages 2–4. Sign up to view the full content.

7. Conclusion: We have enough evidence to conclude that β 1 ≠0. Money supply is significantly related to inflation. 4.4.3.2 Significant relationship between inflation and exchange rate. Significance level=1% Let β 2 =Exchange rate 1. H 0 : β 2 =0 H 1 : β 2 ≠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= 5.7938 6. Decision: Reject H 0. The test statistic (5.7938) is larger than the upper critical value (2.787). 7. Conclusion: We have enough evidence to conclude that β 2 ≠0. Exchange rate is significantly related to inflation. Significance level=5% Let β 2 =Exchange rate 1. H 0 : β 2 =0 H 1 : β 2 ≠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= 5.7938 6. Decision: Reject H 0. The test statistic (5.7938) is larger than the upper critical value (2.060).

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

7. Conclusion: We have enough evidence to conclude that β 2 ≠0. Exchange rate is significantly related to inflation. Significance level=10% Let β 2 =Exchange rate 1. H 0 : β 2 =0 H 1 : β 2 ≠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= 5.7938 6. Decision: Reject H 0. The test statistic (5.7938) is larger than the upper critical value (1.708). 7. Conclusion: We have enough evidence to conclude that β 2 ≠0. Exchange rate is significantly related to inflation.
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

• 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.

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

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern