U.S. durable goods orders slump most in three years

The Commerce Department reported that orders for U.S. durable goods fell in January by the most in three years. Orders for commercial aircraft and business equipment fell most. Machinery orders dropped 10.4 percent.

1. Explain the process by which a decrease in durable goods orders at a constant price level changes equilibrium expenditure and real GDP.
2. What determines the decrease in aggregate demand resulting from a decrease in durable goods orders?