The table above shows some pieces of information about the labor market condition in a country. It shows the number of workers demanded in the country at different levels of real wage. It also shows the labor force participation rates at those real wage levels. For example, if the real wage is 60, only 30% of the civilian population will participate in the labor force. If the real wage is 170, some 85% will participate in the labor force. The general price level in this country is P = 100. The civilian population in this country is 100 million persons. Assume that wages and prices are fully flexible upwards and downwards in the long run. Suppose that over time the participation rate of women in the labor force increased (as it did in the U.S. after 1960s). In particular assume tha
| Real Wage | Number of Workers Demanded | Labor Force Participation Rate |
| 60 | 120,000,000 | 30% |
| 70 | 110,000,000 | 35% |
| 80 | 100,000,000 | 40% |
| 90 | 90,000,000 | 45% |
| 100 | 80,000,000 | 50% |
| 110 | 70,000,000 | 55% |
| 120 | 60,000,000 | 60% |
| 130 | 50,000,000 | 65% |
| 140 | 40,000,000 | 70% |
| 150 | 30,000,000 | 75% |
| 160 | 20,000,000 | 80% |
| 170 | 10,000,000 | 85% |
Ignore what happened in the previous question.
The table above shows some pieces of information about the labor market condition in a country. It shows the number of workers demanded in the country at different levels of real wage. It also shows the labor force participation rates at those real wage levels. For example, if the real wage is 60, only 30% of the civilian population will participate in the labor force. If the real wage is 170, some 85% will participate in the labor force. The general price level in this country is P = 100. The civilian population in this country is 100 million persons. Assume that wages and prices are fully flexible upwards and downwards in the long run.
Suppose that over time the participation rate of women in the labor force increased (as it did in the U.S. after 1960s). In particular assume that as a result of this event the overall labor force participation rate increased by 15 percent.
Therefore, at the existing real wage..... people will want to work
but only..... people will have jobs.
However, in the long run, labor
At that real wage,.....people will want to work and
.....people will have jobs.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
