Question: 1.Explainwhy wage differences persist when labour markets are competitive. 2.Explain demand for money, and also explain the macroeconomic factors that affect the demand for money.

1.Explainwhy wage differences persist when labour markets are competitive.

2.Explain demand for money, and also explain the macroeconomic factors that affect the demand for money.

3. Illustrate how and why each of the following affects the aggregate demand (AD) curve:

(a) A decrease in government purchases.

(b) A cutin tax.

(c) A decrease in planned investment spending by firms caused by pessimism about the future.

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