Capital Market Expectations EOC #12, part B

CFA Level III Economics
#1

for 1 (gov’t tax receipts) it says that a decrease in gov’t tax receipts would be pro growth because the equilibrium level of goods and services would increase. Can someone explain what this means?

thanks

#2

If the government has less in tax receipts, then consumers have more disposable income, which shifts demand curves to the right.

#3

thank you magician!

#4

My pleasure.