, a. In practice in the actual economy, a reduction in aggregate demand reduces real output...

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, a. In practice in the actual economy, a reduction in aggregate demand reduces real output rather than the price level because output is sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. prices are sticky or inflexible downward as a result of resource scarcity, production costs, and interest rate costs among other reasons. prices are sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. output is sticky or inflexible downward as a result of resource scarcity, production costs, and interest rate costs among other reasons. b. A full-strength multiplier, where price doesn't change to mitigate the effects of an aggregate demand change, applies to a decrease in aggregate demand when the aggregate (Click to select) + , a. In practice in the actual economy, a reduction in aggregate demand reduces real output rather than the price level because output is sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. prices are sticky or inflexible downward as a result of resource scarcity, production costs, and interest rate costs among other reasons. prices are sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. output is sticky or inflexible downward as a result of resource scarcity, production costs, and interest rate costs among other reasons. b. A full-strength multiplier, where price doesn't change to mitigate the effects of an aggregate demand change, applies to a decrease in aggregate demand when the aggregate (Click to select) +