a. In practice in the actual economy, a reduction in aggregate demand reduces real output rather than the price level because 0 output is sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. 0 prices are sticky or inflexible downward as a result of resource scarcity, production costs, and interest rate costs among other reasons. 0 prices are sticky or inflexible downward as a result of wage contracts, minimum wage laws, and menu costs among other reasons. 0 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 d - ' ' ' - . ffects of an aggregate demand change, applies to a decrease in aggregate demand when the aggregat supply curve is horizontal demand curve is horizontal supply curve is vertical demand curve is vertical 2 Match the following descriptions with the correct aggregate supply curve. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. a. Immediate short run ? A vertical line. ? The price level is fixed. 7 Output prices are flexible but input prices are fixed. ? A horizontal line. ? An upward-sloping curve. 2 Output is fixed. b. Short run ? A vertical line. ? The price level is fixed. ? Output prices are flexible but input prices are fixed. ? A horizontal line. ? An upward-sloping curve. ? Output is fixed.3 a. An upsloping aggregate supply curve weakens the impact of a rightward shift of the aggregate demand curve by O weakening the effect of the mulitplier on the change in aggregate demand. O strengthening the effect of the mulitplier on the change in aggregate demand. O weakening the effect of the mulitplier on the change in aggregate supply. O strengthening the effect of the mulitplier on the change in aggregate supply. b. The effect of this weakened impact is that some of the increase in aggregate demand is absorbed by the higher prices such that real output does not change by the full extent of the change in aggregate demand. some of the increase in aggregate supply is absorbed by the higher prices such that real output does not change by the full extent of the change in aggregate demand. O some of the increase in aggregate demand is absorbed by the higher wages such that revenue does not change by the full extent of the change in aggregate demand. O some of the increase in aggregate supply is absorbed by the higher wages such that revenue does not change by the full extent of the change in aggregate demand