Answer the following questions about real output, nominal output, and inflation:
a. The price level of a basket of goods in 2008 was $64. The price level of that same basket of goods in 2009 was $68. If 2008 is the base year, what was the price index in 2009?
b. If nominal output is $300 billion and the price index is 115, what is real output?
c. Inflation is 5 percent; real output rises 2 percent. What would you expect to happen to nominal output?
d. Real output rose 3 percent and nominal output rose 7 percent. What happened to inflation?