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A country reduced the working week while keeping output unchanged. What is the likely effect on welfare?

Answer and explanation

Correct answer: Welfare may rise because of more leisure

Welfare is broader than measured production and includes the use of time. If the same output is produced with a shorter working week, people may gain additional leisure for rest, family, education or recreation. This non-monetary benefit can raise quality of life, although the exact effect depends on wages and working conditions. A is correct; unchanged output does not make GDP zero, and the other outcomes are not necessary.

Related tags

Working HoursLeisureQuality Of LifeWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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