The Effects of Inflation Change and Increase in Investments in GDP Growth in US

Model 3 is referred to as the full model (since it contains all) The mean GDP change is 5,164.25 billion dollars with a standard deviation of 3,777.53 billion dollars. The mean of investments is 3305.083 billion dollars with a standard deviation of 4201.91 billion dollars while inflation rate change has a mean of 4.27% and a standard deviation of 4.35.The test above shows that the model has unrestricted heteroskedasticity [Chi-square = 11.07, p = .0039], and thus the robust standard errors are used to minimize heteroskedasticity effects (see figure 2 also).The test above shows that the model has unrestricted heteroskedasticity [Chi-square = 22.34, plt.0.001], and thus the robust standard errors are used to minimize heteroskedasticity effects (see figure 4 also).The test above shows that the model has unrestricted heteroskedasticity [Chi-square = 20.07, p = 0.0012], and thus the robust standard errors are used to minimize heteroskedasticity effects (see figure 6 also).From equation 6, a unit increase in inflation rate adjusting for investment leads to 73.151 units decrease in GDP while a unit increase in investment adjusting for inflation rate leads to .848 units increase in GDP. one percent increase in inflation rate leads to 73.151billion dollars slow-growth in GDP adjusting for investments while an increase of I billion dollars of investments leads to 848 million dollars GDP growth if the inflation rate is held constant.From the above-analyzed results, it is evident that a decrease in the inflation rate and an increase in investments lead to an increase in GDP. This is so because, increasing inflation rate means slowing growth in GDP as the prices of commodities and services increase gradually while the strength of the currency weakens. An increase in investments leads to higher growth due to market confidence and the increase in physical resources.