1. Using a New Base Year to Calculate Real GDP and Inflation. Repeat Exercise 4.5 but use prices from 2012 2. Understanding the Relationship between Real and Nominal GDP in a Figure. In Figure 5.5 the...

1. Using a New Base Year to Calculate Real GDP and Inflation. Repeat Exercise 4.5 but use prices from 2012

2. Understanding the Relationship between Real and Nominal GDP in a Figure. In Figure 5.5 the base year is 2009. Explain why the line for nominal GDP lies below the line for real GDP in the years prior to 2009. If the base year was 2000, where would the two lines cross?