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THE RELATIONSHIP BETWEEN GDP TOWARDS EMPLOYMENT AND UNEMPLOYMENT

By: Bertilla Voyn Bj Bius (BG10110035) Kamsianah Bt Tajudin (BG10110164) Nursyuhada Binti Muhamad Wazir (BG10110388)

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INTRODUCTION

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THEORETICAL FRAMEWORK

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LITERATURE REVIEW

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METHODOLOGY AND DATA

The data is from Simple Regression

The data have three Multiple Regressionvariable which are GDP as dependent, Employment and Unemployment as independent Log-linear Regression Model The range is from 1959 to 2010 and it is quarterly. Normality Distribution

Heteroscedasticity test (4step) Autocorrelation test ( 2 step )

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MULTIPLE REGRESSION

= -5674.722+0.125205X1-0.032600X2 Se = (185.2340) (0.002238) (0.022553) t p = (-30.63542) (55.94006) (-1.445458) = (0.0000) (0.0000) (0.1499)
d = 0.011071

r2 = 0.962382 f-statistic= 2622.286

Equation above shows, the estimated value of B1 is -5674.72, B2 is 0.12 and B3 is -0.033. Thus, if the employment goes up by one unit (1%), gross domestic product (GDP) is expected to increase on the average by about 0.12 and when unemployment increase by one unit (1%), gross domestic product (GDP) is expected to decrease on the average by about -0.033. The

NORMALITY TEST (HYPOTHESIS TESTING)

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Step 1: Hypothesis Testing H0: The error term is normally distributed H1: The error term is not normally distributed Step 2: Decision Rule

Reject the null hypothesis if probability is less than alpha; otherwise do not reject the null hypothesis.

Step 3 : Compute Probability = 0.016572 alpha () = 0.05 (5%) Step 4 : Decision

The probability0.016572 is less than alpha() 0.05. Therefore, we reject the null hypothesis.

F-STATISTIC (HYPOTHESIS TESTING)

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Step 1: Hypothesis Testing R2=0 R20 2: Decision Rule

H0: H1:

Step

Reject

the null hypothesis when F-statistic is greater than critical value (c.v)and it will shows that gdp has a correlation between employed and unemployed, otherwise do not reject. 3: Compute F-statistic = 2262.26 (n) = 2 d.f = n-(k+1) = 208-(2+1) = 205

Step

R2=0.962382 Numerator

RAMSEY TEST (HYPOTHESIS TESTING)

STEP 1: H0: H1:

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misspecification error not misspecification error

STEP 2: The

alternative hypothesis contains statement that is trying to prove the error term is not misspecification error. When probability chi-square is less than alpha(), reject the null hypothesis and it shows that the error term is misspecification error. Chi-Square = 0.0000

STEP 3: Probability

HETEROSCEDASTICITY (WHITE)
Step H0: H1:

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1 : Hypothesis Testing

The is no heteroskedasticity problem The is heteroskedasticity problem 2: Decision Rule

Step

Reject

the null hypothesis if the probability is less than alpha and this ; otherwise do not reject the null hypothesis. 3 : Compute term(r2) = 149.3701 where the probability ChiSquare is 0.0000 () = 0.05 (5%)

Step Error

alpha

HETEREOSCEDASTICITY (WHITE)

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AUTOCORRELATION (DURBIN-WATSON STATISTIC)

Step

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1 : Hypothesis Testing H0: There is no autocorrelation problem H1: There is autocorrelation problem

AUTOCORRELATION (NEWEY TEST)

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DISCUSSION AND CONCLUSION