Which one of the following options would NOT lead to an increase in labour productivity? A. Encouraging foreign direct investment by weakening restrictions which limit foreign entities' ownership of domestic capital. B. Increasing immigration by removing visa caps thus growing the size of the working population. C. Developing new technologies which automate most remaining factory jobs resulting in mass job losses in the manufacturing sector. D. Introducing free higher education for all citizens leading to an increase in the proportion of adults with bachelor's degrees.
Question
Which one of the following options would NOT lead to an increase in labour productivity?
A. Encouraging foreign direct investment by weakening restrictions which limit foreign entities' ownership of domestic capital.
B. Increasing immigration by removing visa caps thus growing the size of the working population.
C. Developing new technologies which automate most remaining factory jobs resulting in mass job losses in the manufacturing sector.
D. Introducing free higher education for all citizens leading to an increase in the proportion of adults with bachelor's degrees.
Solution
The correct answer is B.
Labour productivity is a measure of economic performance that compares the amount of goods and services produced (output) with the number of hours worked to produce those goods and services. It is typically measured as a ratio of output to labor hours.
A. Encouraging foreign direct investment can lead to an increase in labor productivity as it often brings new technologies, skills and processes into the country.
C. Developing new technologies can lead to an increase in labor productivity as it allows for more output to be produced with the same amount of labor.
D. Introducing free higher education can lead to an increase in labor productivity as it can result in a more skilled and educated workforce, which can produce more output per hour worked.
B. Increasing immigration by removing visa caps grows the size of the working population, but it does not necessarily increase labor productivity. While it increases the number of workers, it does not directly affect the amount of output produced per worker. In fact, if the new workers are less skilled or less productive than the existing workforce, it could potentially decrease labor productivity.
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