Suppose the economy is currently in long-run equilibrium with real GDP equal to potential GDP.A positive demand shock,that is not validated by the Bank of Canada,will eventually result in

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A positive demand shock that is not validated by the Bank of Canada will lead to an increase in aggregate demand. In the short run, firms will increase production to meet the increased demand, resulting in a higher price level and real GDP at potential output. However, in the long run, prices will adjust to the increased demand, resulting in a higher price level and real GDP at potential output.

Suppose the Economy Is Currently in Long-Run Equilibrium with Real