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ors, so it will not affect the unemployment rate. In fact, unemployment rate will affect the private consumption, when the unemployment rate is high, then it show that people are losing their jobs. Therefore, people without income are not able to spend or invest. Thus, private consumption will not affect unemployment rate but unemployment rate will affect the private consumption.

There are various type of unemployment, including cyclical unemployment, frictional unemployment, structural unemployment and classical unemployment. Some additional types of unemployment that are occasionally mentioned are seasonal unemployment, hardcore unemployment, and hidden unemployment. Real-world unemployment may combine different types. The magnitude of each of these is difficult to measure, partly because they overlap. The regression output shows that government expenditures do not affect the unemployment rate because there may be a frictional unemployment which is cause by the aggregate demand in the economy. For example, Demand for most goods and services falls, less production is needed and consequently fewer workers are needed, wages do not fall to meet the equilibrium level, and mass unemployment results. Other than that, the unemployment rate also may cause by frictional unemployment which involves people in the way of changing jobs. In this situation, even the government spends more will also not able to reduce the unemployment rate. All these reasons of unemployment are hard to control by the government.

The regression output also shows that net export do not affect the unemployment rate. This is because the international trade will not directly affect the unemployment rate. Volume of trade will show the country is in trade deficit or gained in the international market. The volume of trade whether more or less will not affect the unemployment rate in the country.

From the result above, only investment is 1% significant and it is strongly affect (-0.90) the unemployment rate. This proves that foreign direct investment is very important to a developing country. FDI may create jobs opportunities to the home country. When foreigners invest in that country, they will hire local labors. This may reduce the unemployment rate in that country. Therefore, investment has negative relationship with the unemployment rate.

Chapter 5 Conclusion and Recommendation

5.1 Conclusion

This research is to examine the relationship between unemployment rate and economic growth in Malaysia. The theoretical framework has given the model to examine the relationship between unemployment with the economic growth which is consumption, investment, government spending and trade. According to the test conducted in the data analysis part, the Unit Root Test has demonstrated some of the variables and became stationary after first differentiated. Thus, the Ordinary Lease Square (OLS) regression will be valid in estimation.OLS regression is tested on the relationship between the independent variables and dependent variable. On the other hand, the Hodrick-Prescott Filter has succeeded to remove the unobservable trend of variables. Through the empirical result, the analysis shows that there is a positive relationship between the investment and unemployment, which the relationship is found to be significant.

In conclusion, this research is to understand the relationship between ec本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。