The estimates of Okuns Law for finite distributed lag model is given below

where DUt= alpha + BoGt + e, where DUt is the change in unemployment rate and Gt is the growth rate of GDP.

lag length q=3

variable	coefficient	standard error	t-value	p-value
constant	0.5810	0.0539	10.781	0.0000
G t	-0.2021	0.0330	6.120	0.0000
G t-1	-0.1645	0.0358	-4.549	0.0000
Gt-2	-0.0716	0.0353	-2.027	0.0456
G t-3	0.0033	0.0363	0.097	0.9276

Lag length, q=2

variable	coefficient	standard errors	t-value	p-value
constant	0.5836	0.0472	12.360	0.0000
G t	-0.2020	0.0324	-6.238	0.0000
G t-1	-0.1653	0.0335	-4.930	0.0000
G t -2	-0.0700	0.0331	-2.115	0.0371

i. Do the coefficients of G t and its lags have the expected signs and significant? Explain how would the appropriate lag length be chosen for this estimation.

ii. Estimate the immediate multiplier and the total multiplier from the chosen model.

iii. Estimate the normal growth rate that is needed to maintain a constant unemployment rate.