Suppose a country reduces restrictions on how many hours people can work.If reducing these restrictions increase the total number of hours worked in the economy,but all other factors that determine output are held fixed,then
A)productivity and output both rise.
B)productivity rises and output falls.
C)productivity falls and output rises.
D)productivity and output fall.

Question

Quizplus · Accepted Answer

By reducing restrictions on working hours, people are able to work more hours, leading to an increase in total hours worked. However, since all other factors that determine output are held fixed, such as the number of workers or the amount of capital, this increase in hours worked does not lead to a corresponding increase in productivity. As a result, productivity falls but output rises due to the increased hours worked.

Suppose a Country Reduces Restrictions on How Many Hours People