Which is more important—labor quantity or labor productivity—as a source of economic growth in the United States? Explain.
What will be an ideal response?
Both labor quantity and labor productivity contribute significantly to increased economic growth in the United States. About a third of the increase in economic growth comes from labor quantity and about two-thirds from labor productivity. Clearly, it is not the quantity of labor that is most important but the quality of that labor and how it is used for production.
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Consider the Matching Pennies game:
Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose Player B always uses a mixed strategy with probability of 3/4 for head and 1/4 for tails. Which of the following strategies for Player A provides the highest expected payoff? A) Mixed strategy with probability 1/4 on heads and 3/4 on tails B) Mixed strategy with probability 1/2 on heads and 1/2 on tails C) Mixed strategy with probability 3/4 on heads and 1/4 on tails D) Pure strategy in which Player A always selects heads
If the Fed sells government securities, then there is
A. an increase in the supply of money. B. an increase in the required reserve ratio. C. a decrease in the discount rate. D. a decrease in the supply of money.