How does an increase in the price level influence the AE curve and equilibrium expenditure?

Question

How does an increase in the price level influence the  AE  curve and equilibrium expenditure?

Accepted Answer

The  AE  curve shifts downward and equilibrium expenditure decreases.

Answer

The  AE  curve shifts upward and equilibrium expenditure increases.

Answer

The  AE  curve shifts downward and equilibrium expenditure increases.

Answer

The  AE  curve shifts upward and equilibrium expenditure decreases.

Answer

The  AE  curve does not shift but it becomes steeper and equilibrium expenditure increases.

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