Question

Suppose the government sharply decreases retirement payments for workers nationwide who reach a certain age. This is likely to _____ the labor supply for workers nationwide.

Group of answer choices

increase

be unrelated to

decrease

have no impact on

Answer 1

It has been stated that the government has sharply decreases retirement payments for workers nationwide who reach a certain age.

Since, the government has considerably reduced the retirement payments then retired workers have to look for additional income to maintain their living standards.

So, many of these retired workers will start looking for work.

Thus,

This is likely to increase the labor supply for workers nationwide.

Hence, the correct answer is the option (1) [Increase].