Question: For 43 countries, Figure 6.5 plots the difference between a countrys inflation rate and the U.S. inflation rate, and the percentage change in the U.S.

For 43 countries, Figure 6.5 plots the difference between a country€™s inflation rate and the U.S. inflation rate, and the percentage change in the U.S. against the country€™s currency. The inflation rates and exchange-rate changes are averages over 1980-2009. Redo the figure using inflation rates and changes in a single year, 2010. (Data are available at the text Web site.) How does the figure change when it is based on a single year rather than 30 years? What explains the differences?
In Figure 6.5

Average 45 in nominal 40 exchange 35 30 25 20 15 Uganda change Turkey rate, % Mexico Colombia 1India 0 Canada Japan -5 -5 0 5 1015 20 25 30 35 40 45 50 Average difference of inflation rate from U.S. inflation rate, %

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