Question

Janet, a mother of two, decides to reduce her working hours to spend more time with her children. By itself, assuming everything else being the same, this development has necessarily resulted in a lower quality of life for Janet due to a fall in income (and resultant fall in economic activity as measured by GDP).

Answer 1

Correct Answer:

False

Spending more time with the children, by Janet, is going to improve the quality of life and it make the family to more happier than before. So, it indicates that quality of life gets better.

At the same time, it can be the income effect, that can help Janet to work less and spend time with the family. It means that Janet was already income a good salary or wage that opportunity cost of leisure time made her take some time off for the family. It is going to increase her happiness, make her in better mental health, and work more efficiently to become more productive in nature. As a result, it can contribute to the increase in GDP. Fro example, there are many countries who have people with superior quality of life, have superior real GDP per capita, that those nations with poor quality of life.