5. What causes changes in the natural and actual rates of unemployment Suppose the fictional country of Lowl is facing a decrease in the proportion of younger workers in the labor force due to a...

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Extracted text: 5. What causes changes in the natural and actual rates of unemployment Suppose the fictional country of Lowl is facing a decrease in the proportion of younger workers in the labor force due to a decline in birth rates. Decrease in the future. Increase Not change Most likely Lowl's natural rate of unemployment will The following graph shows Lowl's potential real GDP (the tan line) and actual real GDP (the blue line) from 1990 to 2010. On the graph, use the grey star to highlight the area between the potential and actual GDP lines corresponding to the period when Lowl experienced economic expansion. 10 Expansion 8 7 Actual GDP 3 2 rose above the natural rate Potential GDP fell below the natural rate 1990 1992 1994 1996 1998 2000 2002 2004 2008 2008 2010 was equal to the natural unemployment rate YEAR During the period you identified on the graph, Lowl's actual unemployment rate GDP (Billions of doll ars)