A cut in taxes , shifting the aggregate demand curve to the . increases corporate profits and investment; left increases disposable income and consumption; right decreases government transfers and consumption; right decreases the marginal propensity to save, increasing consumption; left

Increases disposable income and consumption; right

Explanation:

A reduction in the taxes by the government of a particular nation will increase the disposable income of the consumers of that nation. A disposable income refers to the income of the consumer after deducting the taxes.

Hence, if the disposable income of the consumer increases then as a result this will increase the purchasing capacity of the consumers and  the demand for goods & consumption level also increases.

Due to this increase in the disposable income and consumption level, there is a rightward in the aggregate demand curve.

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