Question 2) Money growth rate and inflation rate across countries. Data source: World Development Indicators WDI, World Bank (accessible via the World Bank website and the PolyU library website). Variables: Broad money growth rate (annual % change of broad money supply) & Inflation rate (annual % change of the GDP deflator) Sample Period: 1999 to 2018 Sample construction: Each country in your sample should have 20 pairs of observations on both variables over the sample period. Select all countries from WDI that meet this requirement. Calculate the mean money growth rate and the mean inflation rate for each country cross years. In other words, each country in your sample will end up with one observation on the mean money growth rate and one observation on the mean inflation rate. Finally, remove those countries with an mean inflation rate larger than 40%. a. How many countries are there in your sample? b. What is the mean inflation rate across all countries (i.e., sum of their mean inflation rates divided by the number of countries)? c. What is the mean money growth rate across all countries (i.e., sum of their mean money growth rates divided by the number of countries)? d. Which country has the lowest mean inflation rate? e. Which country has the highest mean money growth rate? f. Plot a diagram relating the money growth rate (on the x-axis) to the mean inflation rate (on the y-axis). Using the concepts discussed in Textbook Ch. 26 and Ch. 27, briefly explain the observed relationship between these two variables.

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