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Low-Income Home: A Case Study

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Tamra, Choosing the expansionary fiscal policy of increasing government spending to support low-income homes is a good topic. By providing more individuals with the opportunity to own a home, neighborhoods can grow and additional jobs can be offered to contractors in order to construct the homes. In addition, the contractors will hire more employees, laborers, electricians, carpenters, and plumbers, which will increase the job opportunities and provide more spending money for the economy. During a recession, the economy experiences a slowdown, which contributes to a drop in household incomes along with an increase in the unemployment rate (Sexton, 2013). Therefore, by stimulating the economy with an increase in government spending, the aggregate demand curve will demonstrate a positive shift, which will contribute to the G for government factor. …show more content…

Without factoring in which way the money will be designated, families will be provided with the ability to build equity, with the possibility of upgrading in the future. Therefore, increasing spending by providing additional jobs along with adding homes will also increase demand form products. Establishing the grounds for the Modern Keynesian Model, a short-term solution to the recessionary recovery could be established by increasing the demand which in turn encourages the producer to increase productivity. Prices would remain constant utilizing this scenario, and the production and demand would both

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