Which of the Following Is Incorrect

Multiple Choice

Which of the following is incorrect?

A) As the Canadian price level rises, Canadian goods become relatively more expensive so that its exports fall and its imports rise.
B) As the price level falls, the demand for money declines, the interest rate declines, and interest rate-sensitive spending increases.
C) When the price level increases, real balances increase, businesses and households find themselves wealthier and therefore increase their spending.
D) Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward flexible prices, reduces the price level.