Final answer:
The correct answer is option b) the capital gains tax.
Step-by-step explanation:
The act that is most likely to increase the level of aggregate demand is a reduction in the capital gains tax. This is because lowering taxes increases the amount of disposable income available for consumers and investors. When consumers have more income, they tend to spend more on goods and services, and investors are more likely to invest when their potential returns after taxes are higher. This increased consumption and investment can lead to an increase in aggregate demand, which consists of consumption, investment, government spending, and net exports.
A reduction in public spending on social goods and infrastructure would decrease government spending, one of the components of aggregate demand, thus likely leading to a decrease in aggregate demand. Similarly, reducing foreign-based purchases and direct investments would primarily affect the net export component negatively. Decreasing transfer payments reduces household income, thus reducing consumer spending and, subsequently, aggregate demand.