BUSI 2003 Topic: Unemployment and Inflation Learning Activity #9 Q1: Explain why the NRU cannot become zero, but cyclical unemployment can. Q2: When the economy is at the potential level of GDP, what would be the NRU and cyclical unemployment? Q3: Suppose that a person's nominal income increases from $100,000 to $115,000 and the CPI rises from 110 to 115. How would the person's real income change? Show your calculations. Q4: Explain why inflation and unemployment are inversely related in the short run