If the consumption function is given

Question # 1 (13 points) a) What is the difference between nominal GDP and real GDP? Why do changes in nominal GDP usually overstate changes in total production in the economy? (2 + 2 = 4 points) b) Use the values for nominal GDP and real GDP given in the following table to calculate the inflation rate between 1929 and 1930. (4 points) 1929 1930 Nominal GDP $10 billion $9 billion Real GDP $9.7 billion $8.9 billion c) How is the CPI inflation calculated? What is the difference between the CPI and the GDP deflator? (2 + 3 = 5 points)