c$.$ Convert the given nominal dollar values to Year $2$ dollars $($these dollar amounts

represent real federal spending$).$

Detailed calculations

Inflation rate $($between Year $1$ and Year $2)=$

Inflation rate $($between Year $2$ and Year $3)=$

Year $1$ Real spending $($in Year $2$$$)=$

Year $2$ Real spending $($in Year $2$$$)=$

Year $3$ Real spending $($in Year $2$$$)=$

d$.$ Calculate the percentage change in real federal spending between Year $1$ and Year $2$

and between Year $2$ and Year $3$ based on the answers you found in part $c.$

Percentage change in real spending between Year $1$ and Year $3=$

Percentage change in real spending between Year $2$ and Year $3=$

e$.$ Does the percentage change in real spending from one year to the other depend on the

year you are choosing to convert the nominal amounts to$?$ Explain.