1.4 Research Hypotheses
In consistent with specific objectives above, this study tests
the following null hypotheses:
i. H0 : Money supply has no effect on inflation rate in
Rwanda.
H1 : Money supply has a significant positive effect on
inflation rate in Rwanda.
ii. H0 : Output has no effect on inflation rate in Rwanda.
H1 : Output has a significant positive effect on inflation
rate in Rwanda.
iii. H0 : Exchange rate has no effect on inflation rate in
Rwanda.
H1 : Exchange rate has a significant positive effect on
inflation rate in Rwanda.
iv. H0 : Interest rate has no effect on inflation rate in
Rwanda.
H1 : Interest rate has a significant positive effect on
inflation rate in Rwanda.
The student's t-test was used
to test the above hypotheses at the 5% significance level.
1.5 Significance of Study
In an inductive perspective, this study increases our
understanding about the effect of studied variables on inflation rate in Rwanda
hence, it can be used by decision markers to control or carry out the problem
of inflation based on correlation coefficient of each variable to the
inflation. In a deductive perspective, this study helps the researcher to
increase deep knowledge about the frequent fluctuations of the prices on the
market; it will also help my community to ascertain further studies about the
inflation based on our achievement.
1.6 Scope of the study
Our research as any other scientific work is limited in time,
space and in the domain. In time, we focused our analysis on the period from
1990 to 2009 because the period allowed us to search recent data related to our
subject.
Regarding the delimitation of space, our study focuses on
Rwandan territory. In the field, our study focuses on aggregate macroeconomic
variables between inflation and its possible effects on the economy.
1.7 Organization of the study
This study have five chapters which will be organized as
follows: Chapter one is an introduction giving the background of the study,
research problem, research objectives, research hypotheses, significance of the
study, hypothesis, and scope of the study. Chapter two is the literature
review. Chapter three presents a discussion of the methodology adopted for the
empirical analysis, followed by the results and discussion of the empirical
analysis in chapter four. The last chapter considers the conclusion and
recommendations.
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