The impacts of both secondary education and bank credit rates on per Coursework

The impacts of both secondary education and bank credit rates on per capital gross domestic product - Coursework Example The study tells that gross domestic product measures a country’s total productivity level. It is defined as the total cost of economic outputs and consists of government expenditure, investments, net export, and consumption. Per capita gross domestic product, a derivative of real gross domestic product is on the other hand a product of population. Consumption in an economy is a factor of people’s disposable income. Similarly, available resources determine the level of a country’s export and hence its net export. Investments, which can be attained through public or private sectors also depends of capital through savings and loans while government expenditures includes spending from central and local governments. Commercial banks and other financial institutions therefore play an important role in economic development through availing investment capital in the form of loans. Provision of financial support also boosts the level of disposable income at a time and as a result boosts consumption. Banks lending capacity however depends on their credit rates that dictate availability of loans as well as loan interest rates. Financial crisis into low credit rates would therefore translate to lower circulation of money and a consequently strained economy through low consumption, investment and export levels. Education has also been identified as an integral factor of economic growth. Researchers and scholars argue that the level of income in jobs is significantly determined by a person’s academic qualifications.... Similarly, educated individuals are relatively more informed and tend to budget their incomes into savings and investments. These observations qualify secondary education, which is a step into colleges and universities, as an important factor to improving per capital gross domestic product (Bloom et al, 2005, p. 16). Research into determining existence and significance of relationships between variables such as per capita gross domestic product and its factors can be undertaken through regression analysis. Linear regression also determines degree of impacts of each explanatory variable in a model and is based on assumptions of linearity, homoscedasticity, and normality of variables (Newbold, Carlson & Thorne, 2010, p. 428; Ryan, 2011, p. 407, 408). This paper seeks to investigate the relationship between per capita gross domestic product and two dependent variables, rate of enrolment in secondary schools and credit rates of financial institutions. The paper will answer two research q uestions, ‘Is there a significant relationship between per capital gross domestic product and two dependent variables, secondary education enrolment and bank rates?’ and ‘Which of the two variables has higher effects on per capita gross domestic product?’ The paper will test the following sets of hypothesis, H 0: ?i=0; There is no significant relationship H 1: not all are zero; there is a significant relationship Using analytical approach, the effects of the two independent variables on per capita gross domestic product will be analysed. The paper will also test on the validity of statistical assumptions of regression analysis. Methods Participants in the project were selected nations whose economic data were