Women entered the labour force in large numbers in the 20th century and increased the economyʹs GDP.This change
A)created inflationary gaps.
B)created recessionary gaps.
C)raised potential output.
D)was only possible in an economy operating above normal rates of utilization.
E)was only possible in an economy operating below normal rates of utilization.

Question

Quizplus · Accepted Answer

Women entering the labor force in large numbers increased the labor supply, which in turn raised potential output. This means that the economy can produce more goods and services at a higher level of employment without sparking inflationary or recessionary gaps. Therefore, the best choice is C, which states that this change raised potential output.

Women Entered the Labour Force in Large Numbers in the 20th