I am completely stuck on these three questions. I have read my chapter, but I am still doubting that I got the answers correct.

1.A decrease in aggregate demand causes a decrease in ______ only in the short run, but causes a decrease in ______ in both the short run and the long run.
a)real GDP; the price level
b)the price level; the price level
c)real GDP; real GDP
d)the price level; real GDP
*I believe after reading that the answer is d*

2. Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result,

a)aggregate demand will increase by 3%
b)the purchasing power of wages will rise if wages increase by 3%
c)the short-run aggregate supply curve will shift to the left as wages increase
d)workers will be willing to take lower wages next year

*I believe the answer is c.

3) A decrease in aggregate demand results in a(n)______ in the _____.
a)recession; long run
b)recession; short run
c)expansion; short run
d)expansion; long run

I believe it may be b because there will be less money during a short time but I am unsure.

Thanks for your help

1) To determine the answer to this question, you need to understand the effects of a decrease in aggregate demand in both the short run and the long run. In the short run, a decrease in aggregate demand will cause a decrease in real GDP (economic output) as firms reduce production to match the lower demand. However, in the long run, the decrease in aggregate demand will also cause a decrease in the price level.

Looking at the answer choices, you correctly identified that the decrease in real GDP is only in the short run, so we can eliminate options (a) and (c). The correct answer is then between option (b) and option (d).

Now, you need to consider whether the decrease in aggregate demand causes a decrease in the price level in both the short run and the long run. According to what you've read, a decrease in aggregate demand does have a long-run effect on the price level, as lower demand leads to lower prices. Therefore, the correct answer is (d) - a decrease in the price level and real GDP.

2) To answer this question, you need to understand the impact of expectations of future price increases on aggregate demand and the short-run aggregate supply curve.

If workers and firms expect prices to be 3% higher next year, it means they are anticipating inflation. This expectation of inflation typically leads to an increase in current spending and aggregate demand as people try to purchase goods and services before the prices rise.

Looking at the answer choices, option (a) is incorrect because the expectation of higher prices does not directly lead to an increase in aggregate demand. Option (b) is also incorrect because the expectation of higher prices does not affect the purchasing power of wages (assuming wages increase by the same amount as prices). Option (d) is also incorrect because workers would not be willing to take lower wages next year due to expectation of higher prices.

The correct answer then is option (c) - the short-run aggregate supply curve will shift to the left as wages increase. This occurs because higher expected prices lead to higher input costs for firms, reducing their profitability and causing a decrease in the quantity of goods and services supplied in the short run.

3) To answer this question, you need to understand the relationship between aggregate demand and economic conditions.

A decrease in aggregate demand signifies a decrease in overall spending in the economy. As a result, businesses experience reduced sales, leading to a decrease in production, employment, and economic growth.

Looking at the answer choices, option (a) is incorrect because a decrease in aggregate demand does not necessarily result in a recession in the long run. Option (b) is correct because a decrease in aggregate demand does lead to a recession in the short run. Option (c) is incorrect because a decrease in aggregate demand does not lead to an expansion in the short run. Option (d) is incorrect because a decrease in aggregate demand does not lead to an expansion in the long run.

Therefore, the correct answer is option (b) - a decrease in aggregate demand results in a recession in the short run.