Plot the ination rate for each country against time and

Question

Table 1.2 gives data on the Consumer Price Index (CPI) for seven industri- alized countries with 1982-1984 = 100 as the base of the index.

a. From the given data, compute the in?ation rate for each country.16

b. Plot the in?ation rate for each country against time (i.e., use the hori- zontal axis for time and the vertical axis for the in?ation rate.)

c. What broad conclusions can you draw about the in?ation experience in the seven countries?

d. Which country's in?ation rate seems to be most variable? Can you offer any explanation?

TABLE 1.2    CPI IN SEVEN INDUSTRIAL COUNTRIES, 1973-1997 (1982-1984 = 100)

Year	Canada	France	Germany	Italy	Japan	U.K.	U.S.
1973	40.80000	34.60000	62.80000	20.60000	47.90000	27.90000	44.40000
1974	45.20000	39.30000	67.10000	24.60000	59.00000	32.30000	49.30000
1975	50.10000	43.90000	71.10000	28.80000	65.90000	40.20000	53.80000
1976	53.90000	48.10000	74.20000	33.60000	72.20000	46.80000	56.90000
1977	58.10000	52.70000	76.90000	40.10000	78.10000	54.20000	60.60000
1978	63.30000	57.50000	79.00000	45.10000	81.40000	58.70000	65.20000
1979	69.20000	63.60000	82.20000	52.10000	84.40000	66.60000	72.60000
1980	76.10000	72.30000	86.70000	63.20000	90.90000	78.50000	82.40000
1981	85.60000	81.90000	92.20000	75.40000	95.30000	87.90000	90.90000
1982	94.90000	91.70000	97.10000	87.70000	98.10000	95.40000	96.50000
1983	100.4000	100.4000	100.3000	100.8000	99.80000	99.80000	99.60000
1984	104.7000	108.1000	102.7000	111.5000	102.1000	104.8000	103.9000
1985	109.0000	114.4000	104.8000	121.1000	104.1000	111.1000	107.6000
1986	113.5000	117.3000	104.7000	128.5000	104.8000	114.9000	109.6000
1987	118.4000	121.1000	104.9000	134.4000	104.8000	119.7000	113.6000
1988	123.2000	124.4000	106.3000	141.1000	105.6000	125.6000	118.3000
1989	129.3000	128.7000	109.2000	150.4000	108.1000	135.3000	124.0000
1990	135.5000	133.0000	112.2000	159.6000	111.4000	148.2000	130.7000
1991	143.1000	137.2000	116.3000	169.8000	115.0000	156.9000	136.2000
1992	145.3000	140.5000	122.1000	178.8000	116.9000	162.7000	140.3000
1993	147.9000	143.5000	127.6000	186.4000	118.4000	165.3000	144.5000
1994	148.2000	145.8000	131.1000	193.7000	119.3000	169.4000	148.2000
1995	151.4000	148.4000	133.5000	204.1000	119.1000	175.1000	152.4000
1996	153.8000	151.4000	135.5000	212.0000	119.3000	179.4000	156.9000
1997	156.3000	153.2000	137.8000	215.7000	121.3000	185.0000	160.5000