Question 25 Which of the following will most likely reduce the natural rate of unemployment? (1) an increase in unemployment benefits (2) an increase in the proportion of prime-age workers \( (35-54) \) as a share of the labor (3) an increase in the labor force participation rate of teenagers (4) an increase in the minimum wage

An increase in the proportion of prime-age workers (ages 35-54) as a share of the labor can significantly reduce the natural rate of unemployment. This age group typically has better experience and skills, leading to lower turnover and higher employability, thus enhancing overall labor market stability. Their presence often correlates with a more resilient economy. Moreover, an increase in the labor force participation rate of teenagers can paradoxically contribute to reducing the natural rate of unemployment. While teenagers often face higher unemployment rates, their increased participation can lead to more job opportunities and experience. This influx can also provide businesses with a broader talent pool, fostering growth and potentially lowering unemployment rates in the long run.