Multiple Regression Empirical Project Essay Example | Topics and Well Written Essays - 2500 words

Multiple Regression Empirical Project - Essay Example A billion dollar increase in net exports holding consumption and direct foreign investments constant leads to 0.47 billion dollar increase in GDP. Considering consumption alone, it was found out that a billion dollar increase in consumption leads to 1.43 billion dollars increase in GDP and that consumption levels explains 99.84% of the total variations in GDP [r2 (60) = 0.9984]. Further, taking foreign direct investments alone, it was found that a billion dollar increase in foreign direct investment leads to 5.33 billion dollars increase in GDP. This model was found to be significant at 5% level of significance and that FDI explains 96.39% of the total variations in GDP Lastly, a billion dollar increase in net exports led to 17.47 billion dollars decrease in GDP and the model with NE alone was found to be significant at 5% level of significance and that NE explains 54.41% of the total variations in GDP. This study aimed at determining the impact of responsible consumption, foreign direct investments and net exports and employed the use of secondary data to proof the objectives. Different writers have argued that consumptions and investments are the key variables on which the GDP depends most. However, other variables like irresponsible consumptions, political un-rests, environmental degradation, and lack of government priorities translate to irresponsible spending are some other factors which should be taken care of for GDP to grow. GDP is the cumulative amount of goods/services which a country produces within a given year (Hall and Mishkin 1982; Hill 1992). When GDP changes, then a country is said to have experienced economic growth (if positive change) and economic melt-down (if negative growth-previous year’s performance is better than current year’s). Factors like level of consumption, direct foreign investments and net exports are some of the factors which contribute to positive GDP growth, hence economic growth (Haron 2005). High direct foreign