Game theory analysis of macro policy suggests that as voters become more short- sighted:
A) policy makers will be tempted to raise taxes.
B) policy makers will be forced to cut spending.
C) policy makers will adopt policies today to achieve balanced budgets in the future.
D) policy makers will be tempted to cut taxes.
E) policy makers will be forced to balance the budget.

Question

Quizplus · Accepted Answer

When voters become more short-sighted, policy makers will be tempted to cut taxes in order to gain popularity and win elections in the short-term. This may result in more debt in the long-term, but politicians may prioritize winning elections over long-term debt reduction strategies.

Game Theory Analysis of Macro Policy Suggests That as Voters