Sizeable Budget Deficits Can Be Expected in the Years Ahead

question 66

Multiple Choice

Sizeable budget deficits can be expected in the years ahead because

• A)the retirement of the baby boom generation will soon begin to push expenditures on both Social Security and Medicare upward.
• B)the political incentive structure encourages politicians to spend more revenue than they are willing to tax.
• C)both a and b are true.
• D)both a and b are false.Budget surpluses can be expected in the years ahead.

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Definitions:

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged, leading to a situation of mutual best response.

Simultaneous Game

A game theory model where players make decisions or choose strategies at the same time, without knowledge of the others' choices.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of other players, leading to a situation where no player has anything to gain by changing only their own strategy.

Payoffs

The outcomes or returns from a particular strategy or action, often analyzed in game theory and economics.