An increase in market labor supply can occur with an increase in immigration as well as:
A) a decrease in the working age population.
B) an unfavorable change in the taste and preference for work.
C) an increase in nonlabor income.
D) a reduction in taxes.

Question

Quizplus · Accepted Answer

A reduction in taxes can increase the net income from work, making work more attractive and potentially increasing the labor supply. Increases in immigration directly add to the labor force. In contrast, a decrease in the working age population, an unfavorable change in taste and preference for work, and an increase in nonlabor income would likely decrease or not affect the labor supply.

An Increase in Market Labor Supply Can Occur with an Increase