Tax increases on business income slow down the rate of increase in aggregate demand by decreasing __________.

consumer spending.

Step 1: Understand the question The question is asking about the effect of tax increases on business income and how it affects aggregate demand.

Step 2: Define key terms Aggregate demand is the total demand for goods and services within a particular market.

Step 3: Connect the concepts When taxes on business income increase, businesses have less money to invest and expand. This can lead to a decrease in production and potentially a decrease in employment.

Step 4: Answer the question With less production and potentially less employment, consumers may have less money to spend. This decrease in consumer spending slows down the rate of increase in aggregate demand.