Illustrate the effect of a decrease in the price level


Problem

In the diagram, draw a level of aggregate expenditures that would lead to an economy at an equilibrium, E, with a real GDP of $8 trillion for a price level of P 5 100. Illustrate the effect of a decrease in the price level to P 5 80. Identify the new equilibrium.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Illustrate the effect of a decrease in the price level
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