The bulk of the decline in the natural rate of unemployment since 1980 is because of
A)a decline in the inflation rate.
B)a decline in the share of young workers in the labor force.
C)increased competition from foreign workers.
D)the depreciation of the dollar relative to foreign currencies.

Question

Quizplus · Accepted Answer

The decline in the share of young workers in the labor force has contributed to the decline in the natural rate of unemployment since younger workers tend to have higher unemployment rates due to less experience and skills. This demographic shift has had a significant impact on the overall natural rate of unemployment. The other options (A, C, and D) are not supported by empirical evidence as major factors contributing to the decline in the natural rate of unemployment.

The Bulk of the Decline in the Natural Rate of Unemployment