An economy produces bread and clothing. In 2000, bread cost $2 a loaf and clothing cost $20 a unit. In the same year, the economy produced 20,000 loaves of bread and 5,000 units of clothing. In 2001, bread cost $1 and clothing $10.

a. If in 2001 the same quantities of goods were produced, what happened to nominal income? To real income (letting 2000 be the base year)? To relative prices?

b. Would output be the same in 2001 as it was in 2000 (assuming aggregate demand curve remains unchanged)?