Economist A.W. Phillips was one of the first economists to present compelling evidence of the correlation between unemployment and wage inflation. Since wages and salaries are a major input cost for companies, rising wages should lead to higher prices for products and services in an economy, ultimately pushing the overall inflation rate higher. As a result, Phillips graphed the relationship between general price inflation and unemployment, rather than wage inflation. Data on unemployment (independent) and inflation (dependent) from the Federal Reserve is on the Excel workbook. a) Find the equation for the regression line for this data.b) Find the correlation coefficient and R2.c) Using the data, is the correlation statistically significant at the 1% level? please do it in excel Observation Unemploymen Inflationdatet RateRate61 1960-01-015.21.272 1961-01-016.61.683 1962-01-015.80.794 1963-01-015.71.310 5 1964-01-016 1965-01-015.61.6114.91.112 7 1966-01-014.01.913 8 1967-01-013.93.2149 1968-01-013.73.615 #1969-01-013.44.716 #1970-01-013.96.25.317 #18 #1971-01-015.91972-01-015.83.319 #1973-01-014.93.620 # 1974-01-015.19.621 #1975-01-018.111.822 #1976-01-017.96.723 #1977-01-017.55.224 #1978-01-016.46.825 #1979-01-015.99.326 # 1980-01-016.313.927 #1981-01-017.511.828 #1982-01-018.68.329 #1983-01-0110.43.730 #31 #1984-01-018.04.31985-01-017.33.532 #1986-01-016.74.033 #1987-01-016.61.434 # 1988-01-015.74.135 #1989-01-015.44.536 #1990-01-015.45.237 #1991-01-016.45.638 #1992-01-017.32.739 # 1993-01-017.33.3 36 #1990-01-015.45.237 #1991-01-016.45.638 #1992-01-017.32.739 #1993-01-017.33.340 #1994-01-016.62.541 #1995-01-015.62.942 #1996-01-015.62.843 #1997-01-015.33.044 #1998-01-014.61.645 #1999-01-014.31.746 #2000-01-014.02.847 #2001-01-014.23.748 #2002-01-015.71.249 #2003-01-015.82.850 #2004-01-015.72.051 # 2005-01-015.32.852 #2006-01-014.74.053 #2007-01-014.62.154 #2008-01-015.04.355 #2009-01-017.8-0.156 #2010-01-019.82.657 #2011-01-019.11.758 #2012-01-018.33.059 #2013-01-018.01.760 #2014-01-016.61.661 #2015-01-015.7-0.262 #2016-01-014.81.22.563 #64 #2017-01-014.72018-01-014.02.165 #2019-01-014.01.566 #2020-01-013.52.567 #2021-01-016.31.4

It is given that unemployment is a independent variable and inflation is dependent variable from the Federal Reservea) The regression analysis is conducted by using the EXCEL procedure as follows: Enter the data. Select Data > Data Analysis >Regression> OK. Enter Input Y Range as B1:B63. Enter Input X Range as A1:A63. Mark Labels. Click OK. The output is, From the output, the equation for the regression line is y^=1.6694+0.3341x.b) From the output, the correlation coefficient is 0.1845, and coefficient of determination is 0.0341. Thus, the correlation coefficient is 0.1845, the value of r2 is 0.0341.c) The hypothesis is, Null hypothesis: H0:ρ=0 Alternative hypothesis: Ha:ρ≠0 The test statistic is, t=rn-21-r2=0.184562-21-0.18452=1.4541 The test statistic is 1.4541. The degrees of freedom is, df=n-2=62-2=60 The hypothesis is two tailed test. The probability of t (1.4541) with 60 degrees of freedom can be obtained using the excel formula “=T.DIST.2T (1.4541, 60)”.The p-value is 0.1511. Decision rule: If p-value ≤ α, then reject the null hypothesis. Conclusion: The p-value (=0.1511) is greater than the level of significance (=0.01). Based on decision rule, do not reject the null hypothesis. Thus, the correlation is not statistically significant at the 1% level.