Final answer:
To reduce unemployment caused by too little Aggregate Demand (AD), the government should implement expansionary fiscal policies such as decreasing taxes and increasing government spending. This will stimulate economic growth and increase employment opportunities.
Step-by-step explanation:
In order to reduce unemployment caused by too little Aggregate Demand (AD), the government should implement expansionary fiscal policies. This includes decreasing taxes and increasing government spending. By decreasing taxes, people will have more disposable income, leading to increased consumption and a shift of the AD curve to the right, thus stimulating economic growth and reducing unemployment.