escribe the short-run and long-run effects on real output and the price level for each the ollowing events. Assume the economy begins at short-run and long-run equilibrium. (Include a eparate diagram for each part of the question.) . Import prices suddenly rise. b. Government institutes a significant reduction in taxes on production.

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overh…