What is the effect of supply-side fiscal policies like decreasing taxes on investment, aggregate demand, and aggregate supply? The investment level in the economy decreases; aggregate demand increases; and aggregate supply increases. The investment level in the economy increases; aggregate demand decreases; and aggregate supply increases. The investment level in the economy increases; aggregate demand increases; and aggregate supply increases. The investment level in the economy increases; aggregate demand increases; and aggregate supply decreases. The investment level in the economy increases; aggregate demand remains unchanged; and aggregate supply decreases