6) How suppose, as happened starting in 2006 that housing prices fall. a) Given your answers to problem 3 above what is likely to happen to the mortgage risk premium (x)? Explain why. As a consequence what happens to investment spending? b) Since housing is major component of household wealth, falling housing prices implies a decrease in household wealth. What is the likely impact of a decrease in household wealth on autonomous consumption co? c) If falling housing prices causes increased defaults on mortgages this can lead to a "wholesale funding" run on banks. What is likely impact of a bank run on banks willingness to lend at any 3 given interest rate? As consequence what is the likely impact of the change in bank lending on autonomous investment bo and autonomous consumption co