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Running head: ECONOMICS Title Name Institution Name 1
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ECONOMICS Qn.1 The concepts that are associated with the Keynesian such as the sticky prices and the behavior in regard to the nominal factors are very critical in the case of the short run. The behavior in the short run case is that a change in the tariffs does not instantly lead to the creation of the new group of factories. Also, a current account that is big in size may sometimes be affordable and advantageous ( Brooks , 2018). In the long run, the economy will balance to new equilibrium depending on the adjustments that occur in diverse factors. Therefore, in the long run, the economy experiences adjustments while in the short run the economy sticky to its equilibrium. Qn.2 A reduction in the amount of money supplied changes the direction of the curve of money against to the left-hand side. This results in a rise in the rate of interest ( Brooks , 2018). The
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