Question: 1. Explain briefly how to convert nominal variables into real variables 2.Suppose nominal income in year 2000 is $3000 and the price index in year

1. Explain briefly how to convert nominal variables into real variables

2.Suppose nominal income in year 2000 is $3000 and the price index in year 2000 is 150, what is the real income of year 2000?

3.Suppose the nominal output this year is $1000 billion while the current price level is measured at 120, what is the real output this year ?

4. Jane makes a loan at 3% interest rates. The inflation rate is 2%. What is the real interest rate?

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