Which of the following is incorrect?
-As the U.S. price level rises, U.S. goods become relatively more expensive so that U.S. exports fall and U.S. imports rise.
-As the price level falls, the demand for money declines, the interest rate declines, and interest-rate sensitive spending increases.
-When the price level increases, real balances increase, businesses and households find themselves wealthier and therefore increase their spending.
-Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward flexible prices, reduces the price level.