Exercise 1.1 Table 1.2 gives data on the Consumer Price Index (CPI) for seven industrialized countries with 1982-1984 = 100 as base of the index. a. From the given data, compute the inflation rate of each country. b. Plot the inflation rate for each country against time (i.e. use the horizantal axis for time and the vertical axis for the inflation rate) c. What broad conclusions can you draw abou the inflation experience in the seven countries? d. Which countries inflation seems to be most variable? Can you offer any explanation? ## Note here I have to skip several rows and add column names. Have a look at ## the raw data. Column names are c('Year', 'Canada', 'France', 'Germany', ## 'Italy','Japan', 'UK', 'US') cpi <- read.table("https://raw.githubusercontent.com/cablegui/Econometrics/master/OriginalData/Table%201.2.txt", skip = 6, col.names = c("Ye...
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