An increase in labor force participation will increase output and living standards at the cost of

Question

Quizplus · Accepted Answer

When labor force participation increases, individuals will need to spend more time working, which implies forfeiting some leisure time. This cost is balanced by the increase in output and living standards that come with a larger workforce. The other answer choices are not necessarily true or connected to labor force participation. For example, higher taxes could be a consequence of government policies unrelated to labor market participation. Higher interest rates may be a result of changes in monetary policy or market forces. Higher exports are not necessarily related to labor force participation, and the same applies to longer work weeks.

An Increase in Labor Force Participation Will Increase Output and Living