Which of the following could decrease aggregate demand?

The reasoning for choosing the option related to an increase in taxes as a factor that could decrease aggregate demand is rooted in the basic principles of how taxation affects economic behavior. When taxes are increased, consumers and businesses have less disposable income or profits available to spend. This reduction in available funds typically leads to decreased consumption by households and reduced investment by businesses.

Aggregate demand represents the total demand for goods and services within the economy at a given overall price level and in a given time period. A decrease in aggregate demand can be caused by various factors, but an increase in taxes can directly reduce the amount of money available for consumption and investment, subsequently lowering the total expenditure in the economy.

In contrast, the other choices illustrate factors that would likely lead to an increase in aggregate demand or maintain it. An increase in consumer wealth generally boosts consumer spending; a decrease in interest rates typically makes borrowing cheaper, encouraging both consumption and investment; and an increase in government spending directly contributes to demand by injecting money into the economy for public goods and services. Each of these scenarios supports or enhances aggregate demand rather than diminishing it.