week 5 checkpoint Essay examples

Submitted By jst1jd
Words: 351
Pages: 2

Checkpoint Week 5 A New House—Risks and Benefits

There are many different government bodies that can influence the national fiscal policy; but the three I feel are most important are the Federal Reserve System, the Legislative, and the Executive branches. The Fed controls the interest rate which in turn controls the mortgage rate which makes a difference on how much money you have to pay the bank back extra after paying back what was borrowed to purchase the house. The Federal Reserve changing the interest rate also affects the price of the homes for sale as well. The legislative branch makes the rules, regulations, and polices that control the housing department and how strict or lenient the market will be. The executive branch has the power to veto anything that the legislative branch tries to pass so they are the branch of government that acts as the balance to the system. When the Federal government changes the interest rates it charges banks either a higher or lower rate which they (the banks) in turn charge the consumers more or less money to borrow money. The higher the interest rate the more money consumers will have to spent in monthly payments as well as the interest on the loan. If the rates are high most people wait to purchase a home until the rates are lower. However, if the interest rates are too low many people rush to purchase a new home which causes a housing bubble to occur. The mortgage rate for this year has fallen over 9 basis