Problem
1. Explain carefully: "A change in the price level shifts the aggregate expenditures curve but not the aggregate demand curve."
2. Suppose that the price level is constant and that investment decreases sharply. How would you show this decrease in the aggregate expenditures model? What would be the outcome for real GDP? How would you show this fall in investment in the aggregate demand-aggregate supply model, assuming the economy is operating in what, in effect, is a horizontal section of the aggregate supply curve?
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.