University-Level Macroeconomics: Neoclassical Consumption Model. Please help me answer the following question in detail with reasoning - all the information for the relevant part has been pasted in the photo below. Thank you.

The neoclassical consumption model provides us with a theory on how households optimally decide their consumption and saving every period. These decisions have implications also on wealth accumulation and inequality. In recent decades income and consumption inequality rose signicantly in the United States and in many European countries. We can use the neoclassical consumption model framework to study the implications of consumption decisions for inequality. Now assume that the government fears the economy might be entering a recession. Therefore, it decides to cut income taxes today in an attempt to mitigate the recessionary effects. (0) How will consumption react? What will change if some households face a borrowing constraint