The correct option is A That the number of new temporary positions would decline as fewer workers who preferred temporary employment entered the workforce.
Some observers have attributed the dramatic growth in temporary employment that occurred in the United States during the 1980s to increased participation in the workforce by certain groups, such as first-time or re-entering workers, who supposedly prefer such arrangements."- hints that as time goes on these first time or re-entering workers would stop preferring temporary work arrangements. The passage discourages firms from creating temporary work jobs which would remove option B from the context. Product demand is fluctuating and is only favored by employers adapting to it and looking to reduce labor costs. So, even though this creates temporary positions, it would not sustain them. Thus, D is removed from the context. Options C and E do not fit the context. Thus, A is the correct answer here.