Final answer:
The aging of the labor force is likely to 'increase' the natural rate of unemployment, while an increase in labor market efficiency is likely to 'decrease' it, making the correct answer B. increase; decrease. The entry of more women into the labor force raised the natural rate of unemployment due to it being a demographic shift and not recession-related.
Step-by-step explanation:
The aging of the labor force in the United States is likely to increase the natural rate of unemployment because as workers get older, they typically have a harder time finding new jobs after being laid off due to mismatches in job skills or a reluctance to relocate. Conversely, an increase in the efficiency of the labor market is likely to decrease the natural rate of unemployment, as it would mean a better match between job seekers and openings, and reduced time to find employment. Therefore, the correct answer is B. increase; decrease.
When considering the increase in labor force participation rates among women, it's more accurate to say that it increased the natural rate of unemployment, rather than cyclical unemployment. This is because the influx of women into the workforce was a social demographic trend and was not caused by the economy falling into a recession. New entrants to the labor force, such as women or recent college graduates, would typically be classified as frictionally unemployed until they secure employment, which is also related to the natural rate of unemployment.