In practice in the actual economy, a reduction in aggregate demand reduces real output rather than the price level because multiple choice 1 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