Let AE = Aggregate Expenditures, C = Consumption, I_P =

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment,
G = Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, an increase in the price level,

A) causes a movement up along a given aggregate expenditures curve and raises the equilibrium real GDP.
B) causes a movement down a given aggregate expenditures curve and lowers the equilibrium real GDP.
C) shifts the aggregate expenditures curve upwards and raises the equilibrium real GDP.
D) shifts the aggregate expenditures curve downwards and lowers the equilibrium real GDP.