XECO212-Housing

The difficulties of the economy affect many of the decisions you make as a consumer. No more so than when you are buying a house. The health of the economy is a factor you should consider when buying a house. Sometimes the economy favors sellers and at other times it favors buyers. This CheckPoint helps you refine your decision to buy a house; it prepares you to explain in your final project how the strength of the economy, government spending, and taxes affect the marginal costs and benefits of your decision. • Consider the role of government bodies that affect the strength of the economy. • Assume for this CheckPoint that purchasing a new home would be a major decision requiring a substantial financial outlay where the wrong decision would have long-term financial consequences. • Submit a 250- to 300-word response addressing the following points:
o Explain how the strength of the economy as a whole could affect the marginal benefits and the marginal costs associated with a decision to purchase a home.
o How would removal of the tax deduction on mortgage interest affect the housing market?
o How would other changes in government spending and taxes affect your decision?

350 words answer.
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