The following table shows the results of a regression that estimates the unemployment rate (in percent)...

  

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The following table shows the results of a regression that estimates the unemployment rate (in percent) in Malaysia for the period 1976-2020. The independent variables included in the model are inflation rate (in percent), logarithm of private consumption expenditure, and growth of population (in percent). Model 1: OLS, using observations 1976-2020 (T=45) Dependent variable: unemployment rate (in percent) Variables coefficients p-value -0.7897 0.5203 -1.1189 0.0000 const Inflation log of consumption expenditure growth of population R-squared Residual Sum of Squares (SSE) DW Statistic 0.0041 0.4328 0.5632 1084.52 0.3661 0.0001 0.0186 (a) Based on statistical relationships presented in the above regression results, can you conclude that changes in unemployment rate in Malaysia are influenced by the included independent variables? Explain. [5 marks] (b) Interpret the estimated coefficient of 'log of consumption expenditure. [7 marks] (c) Test, at the 1% significance level, whether a higher rate of population growth results in a higher unemployment rate in Malaysia. State the null and alternative hypotheses clearly. [5 marks] (d) Another researcher suggested that 2007-08 financial crisis might also have an impact on the unemployment rate in Malaysia. Explain how you would control for the impact of financial crisis in a regression model that estimates the unemployment rate. [6 marks] (e) Test, at the 5% significance level, whether the results of the above regression model violate the OLS assumption of no autocorrelation of error terms. State the null and alternative hypotheses clearly. [5 marks] (1) Based on the result of the test in part (e) of this question, comment on the reliability and validity of the regression estimates. [7 marks] The following table shows the results of a regression that estimates the unemployment rate (in percent) in Malaysia for the period 1976-2020. The independent variables included in the model are inflation rate (in percent), logarithm of private consumption expenditure, and growth of population (in percent). Model 1: OLS, using observations 1976-2020 (T=45) Dependent variable: unemployment rate (in percent) Variables coefficients p-value -0.7897 0.5203 -1.1189 0.0000 const Inflation log of consumption expenditure growth of population R-squared Residual Sum of Squares (SSE) DW Statistic 0.0041 0.4328 0.5632 1084.52 0.3661 0.0001 0.0186 (a) Based on statistical relationships presented in the above regression results, can you conclude that changes in unemployment rate in Malaysia are influenced by the included independent variables? Explain. [5 marks] (b) Interpret the estimated coefficient of 'log of consumption expenditure. [7 marks] (c) Test, at the 1% significance level, whether a higher rate of population growth results in a higher unemployment rate in Malaysia. State the null and alternative hypotheses clearly. [5 marks] (d) Another researcher suggested that 2007-08 financial crisis might also have an impact on the unemployment rate in Malaysia. Explain how you would control for the impact of financial crisis in a regression model that estimates the unemployment rate. [6 marks] (e) Test, at the 5% significance level, whether the results of the above regression model violate the OLS assumption of no autocorrelation of error terms. State the null and alternative hypotheses clearly. [5 marks] (1) Based on the result of the test in part (e) of this question, comment on the reliability and validity of the regression estimates. [7 marks]

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