Question

Over the last several years there has been a decrease in the number of new homes purchased within Country DF. One reason for this is that taxes are high, so citizens have less money to invest in such large purchases. The federal government has determined that actions need to be taken to encourage citizens to purchase homes and boost economic growth.
What action can the government of Country DF take to encourage citizens to purchase homes?
Responses

lower income taxes for homeowners
lower income taxes for homeowners

raise income taxes
raise income taxes

raise property tax rates

Answer 1

lower income taxes for homeowners

Lowering income taxes for homeowners increases their disposable income and reduces the net cost of buying and owning a home, encouraging more people to purchase. Raising income taxes or property taxes would have the opposite effect.