The table below shows real GDP, potential GDP and the unemployment rate for a hypothetical economy. TABLE 31- 1
-Some economists argue that increases in labour- force participation rates by young people and females in the 1970s and 1980s caused

Question

The table below shows real GDP, potential GDP and the unemployment rate for a hypothetical economy.  TABLE 31- 1
-Some economists argue that increases in labour- force participation rates by young people and females in the 1970s and 1980s caused

Quizplus · Accepted Answer

The increase in labor-force participation rates by young people and females in the 1970s and 1980s is argued to have led to an increase in the Non-Accelerating Inflation Rate of Unemployment (NAIRU) because these groups typically have higher rates of unemployment, thus raising the overall NAIRU.

The Table Below Shows Real GDP, Potential GDP and the Unemployment