# Question: For the cost matrix of Exercise 3 In exercise a Suppose

For the cost matrix of Exercise 3,

In exercise

a) Suppose P(Recession) = 0.2, P(Stable) = 0.2, and P(Expansion) = 0.6. What is the expected value of each action?

b) What is the best choice using the expected-value approach?

In exercise

a) Suppose P(Recession) = 0.2, P(Stable) = 0.2, and P(Expansion) = 0.6. What is the expected value of each action?

b) What is the best choice using the expected-value approach?

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