Plot the ination rate for each country against time and


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

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Microeconomics: Plot the ination rate for each country against time and
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