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/> A critical region of size alpha is determined using the sample distribution of the test statistics

Using the sample data, identify the values of test statistics

The last step is confirming that the value of test statistics falls under the critical region defined; if no, we accept the null in favour of the alternative hypothesis and if yes, we reject the null hypothesis.

5. Variables considered as independent in hypothesis and doing regression analysis

In doing the analysis of various factors affecting GDP growth some of the factors which is been considered as the variables are FDI, Employment ratio, Population and Lending interest rate as they impact directly in the growth of GDP for any country. The factors are denoted by 'r' and following relation between the factors as stated above and the regression can be explained under

5.1) Population (H1)

Although increase in population has a negative impact on the economy of any country. However, such increase allows availability of labor at cheap rates which attracts the companies or firms to make more investment in the form of Foreign direct investment or FII's that helps to give upward thrust in GDP.

5.2) Foreign Direct Investment(H2)

It can be argued on the grounds of proven facts that Foreign Direct Investment has a positive relation for boosting the economic growth of any country which results in increasing the GDP of the country. FDI allows the money to come in the economy which creates opportunities to increase growth of the economy.

5.3) Employment Ratio(H3)

It also affects the economy which indeed affects GDP growth as with the increase in the employment more expenditure will have to be incurred which in turn affect country's GDP

5.4) Lending Interest Rate(H4)

If the interest rate increases it will lead to less money circulation in the economy. The banks and financial institutions of the country will not able to lend money as the people will not be willing to accept because the increase in interest rate will attract more interest expense and hence will resist to it. This will result in decrease in the consumption which will bend the GDP down and secondly money circulation will also reduce which result in the fall in GDP growth.

Hence the whole discussion can be summarized in the following manner-:

H1- Increase in population lead to increased GDP. Hence it has a positive relation

H2- Increase in FDI Increases GDP. It also has a positive relation

H3- Increase in employment leads to increase in GDP. It shows positive relation

H4- Increase in Interest rate leads to fall in GDP. It has a negative relation

6). Regression results

6.1) Employment Regression (Appendix 9.3.1)

In this regression model,

Employment ratio is an independent variable and on X-axis.

GDP is a dependent variable and on y-axis.

After doing data analysis of this model, we conclude that the regression equation for this is:

Here,

is an intercept which is 1.736

is a slope of this equation which is -2.958

– Estimated value

If employment ratio is increase by 1, there is decrea