Unformatted text preview: financially stable and able to make those kind of large purchases. In an economic down turn people do not want to borrow funds they are not sure they can pay back and take the chance of losing their home. If taxes on mortgage interest are reduced, the demand for houses would in turn be reduced. This is partly because consumers feel they will not have any benefit from purchasing a home as they did during better times when taxes were higher. Therefore; government spending and tax increases would affect a decision of someone wanting or considering a home purchase. Increasing taxes means eventually lower income families would end up paying more taxes and the result would be less of a demand in the housing market. People would be more cautious with larger purchases or would not be able to afford such a large purchase....
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This note was uploaded on 02/28/2012 for the course ECONOMICS XECO 212 taught by Professor Tsilis during the Spring '09 term at University of Phoenix.
- Spring '09