How does chest wall compliance affect functional residual capacity (FRC)?
As far as lung is concerned both inspiration and expiration are passive. Lung just responds to intrathoracic pressure by accommodating more air during inspiration and expelling air during expiration. The active processes in the lung as far as air flow is concerned are limited to the bronchial tree smooth muscles which can increase or decrease the resistance to air flow. The compliance of the lung parenchyma is a function of its anatomical composition.

During inspiration the thoracic volume is actively increased by:


Outward expansion of ribs by the intercostal muscles
Downward expansion of diaphragm


This increase in thoracic volume is refected in all intra thoracic organs:


Venous return increases due to the negative pull 
Negative pleural pressure causes air to be pulled into the lungs


Normal expiration on the other hand is passive due to relaxation of the above mentioned muscles. Relaxation will cause a decrease in the thoracic volume which will push the excess air and blood out.

An increase in the compliance of the thoracic cavity would mean weakening of the fascia and bones of the thoracic cage. In other words, the structures that the muscles attach to will become weak. This will cause muscle action to cause excessive expansion of the thoracic cage during inspiration and during expiration due to weaker pull by the attached structures, even residual tone of the muscle may cause distortion of anatomy preventing adequate reduction in the thoracic volume causing increased residual volume. Thusb reducing the volume of the air expired.