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In the short run, prices and real GDP can rise due to increased aggregate demand, often sparked by factors such as government spending, consumer confidence, or lower interest rates. When demand for goods and services outpaces supply, businesses may raise prices, leading to inflation. Additionally, firms may ramp up production to meet the higher demand, resulting in an increase in real GDP. However, this scenario may also lead to potential overheating of the economy if sustained over time.

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