David Maneiro Project 3 12 12 19 1 The three variables I I m using for this project are General National Income GDP and Unemployment Rate For this project I will be using GDP as the depend variable and General National Income and Unemployment Rate as the independent variables GDP is the dependent variable because both of the independent variables are part of what makes up GDP 2 Looking at the Graph between GDP and Unemployment Rate we see that there is a negative relationship as UER goes up GDP goes down This is to be expected as if people are out of jobs companies are not making as much product leading to a drop in GDP and if people are jobless there will be a drop in demand for goods and services Looking at the Graph between GDP and General National Income we see that there is a Positive relationship as GNI goes up GDP goes down This is to be expected as if people are making more money the demand for goods and service will increasing leading to an increase in GDP 3 Looking at the regressions we confirm that UER has a negative relationship with GDP and GNI has a positive relationship with GDP however looking that the t values we see that both of these variables are insignificant possible do the omission bias as GDP has many factors that go into it 4 Looking at the Holt s methods I found the alpha of UER and GNI to be 0 89 and 0 99 respectively and an initial forecast of 5 74 and 12041 47 using this information I forecasted the UER and GNI for Q3 2019 to be 3 6 and 21 618 22 respectively 5 331 190 24 6 741e 03 21 618 22 5 931e 02 3 6 8 011e 01 Using the forecasted data from part 4 we forecasted the GDP for Q3 2019 to be 331 190 24 Coding library ggplot2 library forecast library tseries library TSA data read csv file choose header TRUE GDP ts data GDPC1 frequency 4 start c 2004 04 UER ts data UER frequency 4 start c 2004 04 GNI ts data GNI frequency 4 start c 2004 04 autoplot GDP xlab Year ylab GDP plot UER plot GNI autoplot diff log GDP 100 dars diff log GDP 100 dri diff UER dps diff GNI autoplot UER autoplot GNI r1 tslm GDP UER r2 tslm GDP GNI summary r1 ress residuals r1 plot ress summary r2 ress residuals r2 plot ress fc1 holt UER h 1 plot fc1 summary fc1 fc2 holt GNI h 1 plot fc2 summary fc2 reg3 tslm GDP UER GNI summary reg3