a) The 3 exogenous variables within IS-LM model include investment, consumption and liquidity. Based on the theory, liquidity depends on money supply's velocity and size. Consumption and investment levels are based on marginal decisions as per the individual actors.
Endogenous variable tend to be a variable which is determined or changed through its linking factors with the rest of the variables within statistical model. Similarly, endogenous variable correlates with other aspects within the area.
b)
When rate of unemployment rises, it tends to be more hard for people finding employment at some companies. Therefore, the bargaining power of workers will fall. The nominal wage falls when the bargaining power falls.
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