Explain change in taxes affects consumption-aggregate demand

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Reference no: EM133206358 , Length: Words Count:150

Assignment:

First Assignment:

Consumer spending is linked to disposable income. The Trump Administration enacted tax reform in December 2017 with the passage of the Tax Cuts and Better Jobs Act (please see a summary along with recent trends in certain provisions proposed to become permanent at and), included in the reform act a reduction in lower the individual tax rate for top-tier earners from 39.6% to 35% and cutting the corporate tax rate to 15%. Explain how this change in taxes affects consumption, aggregate demand, and investment spending. With this in mind, should this be enacted?

Second Assignment: minimum of 150 words

For the Critical Thinking Exercise, you will explain the Keynesian view to enacting tighter federal restrictions on mortgage lending practices including requiring higher down payment levels and increasing the minimum credit score required to approve housing loans. A major contributor to the 2008-2009 Great Recession was the housing market "bust" that was characterized by rising home values that caused the AD curve to shift to the right as more household saw an increase in wealth due to the appreciation. Explain based on your readings and supplementary resources, how would such a shift in regulatory policy impact the housing market and pricing? For support you can utilize information from the National Association of Realtors at the links below.

Housing Statistics

Reference no: EM133206358

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