Members of the Central Bank and Canadabank Are Both Vying

question 28

Multiple Choice

Members of the Central Bank and Canadabank are both vying for promotions.Central Bank members receive promotions if they keep interest rates and unemployment low.Canadabank officers receive promotions if they make loans with few defaults.In case A,the Bank keeps money growth low,minimizing inflation,but hurting growth;and in Case B,they allow money growth,which reduces interest rates,but increases inflation in the long run.In case C,Canadabank officers make few loans,minimizing the variability of profits;and in case D,they make many loans,increasing the variability of profits.The possible outcomes and promotions are listed below:
$$\begin{array} { c c c } \text { Outcome } & \text { Bank } & \text { Canadabank } \\\hline ( \mathrm { A } , \mathrm { C } ) & 10 & 10 \\( \mathrm {~A} , \mathrm { D } ) & 20 & 5 \\( \mathrm {~B} , \mathrm { C } ) & 5 & 20 \\( \mathrm {~B} , \mathrm { D } ) & 15 & 15 \\\hline\end{array}$$
Assume members of the Bank and Canadabank don't care whether other people receive promotions.If the Bank makes their policy move first,what action will each bank take?

• A)(A,C)
• B)(A,D)
• C)(B,C)
• D)(B,D)

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Definitions:

Interquartile Range

A measure of statistical variability that describes the range between the first (25th percentile) and third (75th percentile) quartiles, effectively capturing the middle 50% of the data.

1st Quartile

The value below which 25% of the observations in a dataset fall, also known as the 25th percentile.

3rd Quartile

The 3rd quartile, also known as Q3, marks the value below which 75% of the data in a dataset falls, effectively dividing the higher quarter of data from the rest.

Range

The gap between the maximum and minimum figures within a set of data.