Which of the following best explains the effect of a contractionary fiscal and monetary policy on the aggregate demand of an economy? The aggregate demand decreases, due to a decrease in taxes and reserve requirements. The aggregate demand decreases, due to an increase in taxes and reserve requirements. The aggregate demand increases, due to an increase in taxes and reserve requirements. The aggregate demand remains unaffected, due to decreases in taxes and reserve requirements. The aggregate demand remains unaffected, due to increases in taxes and reserve requirements