The Table Below Shows the Percentage of the Labour Force

question 109

Multiple Choice

The table below shows the percentage of the labour force accounted for by males and females over a two-decade period.Assume that real GDP is equal to potential in each of the given years.
% of Labour Force
TABLE 30-4
-Refer to Table 30-4.Suppose that for each year listed the unemployment rate among males is 5% while it is 7% among females.Which of the following statements correctly describes the change in the NAIRU in this economy between 1960 and 1980?

• A)Since females account for a smaller percentage of the labour force in all years,the NAIRU is decreasing over time.
• B)The NAIRU remains constant between 1960 and 1980 because the unemployment rates for males and females remain constant.
• C)Since females have a higher unemployment rate,the NAIRU increases over time as the female share in the labour force increases.
• D)Since real GDP is equal to potential GDP in all years,cyclical unemployment is equal to zero,and therefore the NAIRU does not change.
• E)Since males have a lower unemployment rate,and they make up a larger percentage of the labour force,the NAIRU is decreasing over time.

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Definitions:

Wage Differential

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