PROJECT ON

STATISTICAL
INVESTIGATION
Research Methodology Lab
BBA 215
Teacher’s Name: MOHAMMED SHAHID IRSHAD

We confirm that this assignment is my own work.

Where I have referred to academic sources, I have provided in-
text citations and included the sources in the final reference list.

MADE BY : AASHISH AGNIHOTRI (2K20/BBA/05)

AMUJ KUMAR PANDEY (2K20/BBA/22)
 CERTIFICATE

This is to certify that Anuj Kumar Pandey

(2K20/BBA/22) and Aashish Agnihotri
(2K20/BBA/05), students of University School of
Management & Entrepreneurship, Delhi
Technological University, Delhi have successfully
completed the project work as prescribed the
university in the partial fulfillment of the requirement
of bachelors of Business Administration Program for
the academic year 2020-2023.

The project work is titled as “Project on Statistical

Investigation”

Project Guide
Mohammed Shahid Irshad
Assistant Professor
USME, DTU
 DECLARATION

We, the undersigned, hereby declare that the project

report titles, “Project on Statistical Investigation”
submitted by us to the Delhi Technological
University, in partial fulfillment of the requirement for
the degree of Bachelors of Business Administration
under the guidance of Mohammed Shahid Irshad, is
our original work and the conclusions drawn therein
are based on the material collected by ourselves.

We confirm that we have not used work previously

produced by another student or any other person to
hand in as our own.

Place: New Delhi

Date: 24th April 2022

Anuj Kumar Pandey (2K20/BBA/22)

Aashish Agnihotri (2K20/BBA/05)

ACKNOWLEDGEMENT
We both students of BBA of 2nd year in University
School of Management and Entrepreneurship, Delhi
Technological University will be using this
opportunity to express our gratitude to everyone who
supported us throughout the course of this report.

We are sincerely grateful to Mohammed Shahid

Irshad, who guided us for the completion of this
report. We would also like to thank our teacher for
providing us with knowledge about the critical
aspects of the topics related to this report helping us
whenever needed.

TABLE OF CONTEXT
 1. Introduction

2. Methodology

3. Calculations and Graphs

4. Analysis of data

5. Conclusion

6. References

Introduction
In this project, we have identified a problem and we tend to solve the problem by performing
various functions on excel and performing some tests as well which will help us in solving the
problem which is inflation in GDP. With the help of these tests, we will also look and try to
analyze what caused and what changed after inflation and all the whereabouts as well.

● Inflation means the rate at which the value of a currency is falling and, consequently, the
general level of prices for goods and services is rising.
● Inflation is sometimes classified into three types: Demand-Pull inflation, Cost-Push
inflation, and Built-In inflation.
● The most commonly used inflation indexes are the Consumer Price Index (CPI) and the
Wholesale Price Index (WPI).
● Inflation can be viewed positively or negatively depending on the individual viewpoint
and rate of change.
● Those with tangible assets, like property or stocked commodities, may like to see some
inflation as that raises the value of their assets.

Causes of Inflation
An increase in the supply of money is the root of inflation, though this can play out through
different mechanisms in the economy. Money supply can be increased by the monetary
authorities either by printing and giving away more money to the individuals, by legally
devaluing (reducing the value of) the legal tender currency, more (most commonly) by loaning
new money into existence as reserve account credits through the banking system by purchasing
government bonds from banks on the secondary market.

Built-in Inflation
Built-in inflation is related to adaptive expectations, the idea that people expect current inflation
rates to continue in the future. As the price of goods and services rises, workers and others
come to expect that they will continue to rise in the future at a similar rate and demand more
costs or wages to maintain their standard of living. Their increased wages result in a higher cost
of goods and services, and this wage-price spiral continues as one factor induces the other and
vice-versa

Is Inflation Good or Bad?

Too much inflation is generally considered bad for an economy, while too little inflation is also
considered harmful. Many economists advocate for a middle-ground of low to moderate
inflation, of around 2% per year.

Generally speaking, higher inflation harms savers because it erodes the purchasing power of
the money they have saved. However, it can benefit borrowers because the inflation-adjusted
value of their outstanding debts shrinks over time.
Nominal GDP
The nominal GDP is the value of all the final goods and services that an economy produced
during a given year. It is calculated by using the prices that are current in the year in which the
output is produced. In economics, a nominal value is expressed in monetary terms.

Real GDP
The real GDP is the total value of all of the final goods and services that an economy produces
during a given year, accounting for inflation. It is calculated using the prices of a selected base
year.

Methodology
The Methodology to analyze the nature of inflation and relationship between inflation and real &
nominal GDP. We have taken a sample data of real and nominal GDP from 1951-52 to 2004-05
and we have tested three tests: T TEST PAIRED TWO SAMPLE FOR MEANS, REGRESSION
and F TEST TWO SAMPLE FOR VARIANCES.

1. T TEST PAIRED TWO SAMPLE FOR MEANS

A t-test is a type of inferential statistic used to determine if there is a significant
difference between the means of two groups, which may be related in certain features. It
is mostly used when the data sets, like the data set recorded as the outcome from
flipping a coin 100 times, would follow a normal distribution and may have unknown
variances. A t-test is used as a hypothesis testing tool, which allows testing of an
assumption applicable to a population.

2. REGRESSION

Regression analysis is a reliable method of identifying which variables have impact on a

topic of interest. The process of performing a regression allows you to confidently
determine which factors matter most, which factors can be ignored, and how these
factors influence each other.

In order to understand regression analysis fully, it’s essential to comprehend the

following terms:

● Dependent Variable: This is the main factor that you’re trying to understand or predict.
● Independent Variables: These are the factors that you hypothesize have an impact on
your dependent variable.
 3. F TEST TWO SAMPLE FOR VARIANCES
F test is a statistical test that is used in hypothesis testing to check whether the
variances of two populations or two samples are equal or not. In an f test, the data
follows an f distribution. This test uses the f statistic to compare two variances by
dividing them. An f test can either be one-tailed or two-tailed depending upon the
parameters of the problem. If we are using an F Test using technology, the following
steps are there:
1. State the null hypothesis with the alternate hypothesis.
2. Calculate the F-value, using the formula.
3. Find the F Statistic which is the critical value for this test. This F-statistic formula is
the ratio of the variance of the group means divided by the mean of the within-group
variances.

4. Finally, support or reject the Null Hypothesis.

Calculations and Graphs

NOMINAL AND REAL GROSS DOMESTIC PRODUCT, 1951-52 TO 2004-05

YEAR NGDP RGDP YEAR NGDP RGDP YEAR NGDP RGDP

1951-52 10721 242995 1971-72 29523 525584 1991-92 654729 1206346
1952-53 10522 249386 1972-73 54591 522698 1992-93 752591 1272457
1953-54 11452 264720 1973-74 66428 540045 1993-94 865805 1333123
1954-55 10834 277428 1974-75 78426 546443 1994-95 1015764 1421831
1955-56 11030 286370 1975-76 84221 596428 1995-96 1191813 1529453
1956-57 13140 302352 1976-77 90751 606301 1996-97 1378617 1645037
1957-58 13536 301063 1977-78 102796 650311 1997-98 1527158 1711735
1958-59 15086 323324 1978-79 111371 687435 1998-99 1751199 1817752
1959-60 15895 331784 1979-80 122155 651430 1999-00 1952036 1952035
1960-61 17407 350117 1980-81 145370 695361 2000-01 2102314 2030711
1961-62 18445 363110 1981-82 170805 737078 2001-02 2278952 2136651
1962-63 19826 373698 1982-83 191059 762622 2002-03 2424261 2217133
1963-64 22774 396034 1983-84 222485 818288 2003-04 2754620 2402727
1964-65 26563 425560 1984-85 249268 849573 2004-05 3149407 2602065
1965-66 28016 414263 1985-86 281330 894041
1966-67 31711 414115 1986-87 314816 936671
1967-68 37133 446548 1987-88 357861 973739
1968-69 39324 461612 1988-89 424531 1067582
1969-70 43298 491798 1989-90 487684 1131111

T TEST PAIRED TWO SAMPLE FOR MEANS

t-Test: Paired Two Sample for

Means

Variable 1 Variable 2
Mean 525876.3519 887016.1481
Variance 6.55E+11 3.97E+11
Observations 54 54
Pearson Correlation 0.968563893
Hypothesized Mean Difference 0
df 53
t Stat -10.47344004
P(T<=t) one-tail 8.14E-15
t Critical one-tail 1.674116237
P(T<=t) two-tail 1.63E-14
t Critical two-tail 2.005745995

Regression

SUMMARY
OUTPUT

Regression Statistics
Multiple R 0.968563893
R Square 0.938116014
Adjusted R
Square 0.936925938
Standard
Error 203206.8194
Observation 54
s

ANOVA
Significa
df SS MS F nce F
Regression 1 3.26E+13 3.26E+13 788.282 4.33E-33
Residual 52 2.15E+12 4.13E+10
Total 53 3.47E+13

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
- -
48147 67438
Intercept -577930.324 48065.7 -12.0238 1.23E-16 -674381 9 1 -481479
1.3333 1.1554
X Variable 1 1.244404263 0.044322 28.07636 4.33E-33 1.155465 43 65 1.333343

F TEST TWO SAMPLE FOR VARIANCES

F-Test Two-Sample for Variances

Variable 1 Variable 2
Mean 525876.3519 887016.1481
Variance 6.55E+11 3.97E+11
Observations 54 54
df 53 53
F 1.650693459
P(F<=f) one-tail 0.035422613
F Critical one-tail 1.57767967

ANALYSIS OF THE DATA

The analysis of our project and the tests we did to solve the problem showed us that T-Stat
value is higher than the value of T- Critical and thus, the null hypothesis has been rejected and
there is a positive relationship between Real and Nominal GDP..

I
CONCLUSION

Real GDP tracks the total value of goods and services by calculating the quantities but
using constant prices that are adjusted for inflation. Real GDP is nominal GDP adjusted
for inflation. If prices change from one period to the next but actual output does not, real
GDP would remain the same.