Final answer:
An increase in international demand for Ecoland's copper exports would shift its aggregate demand curve to the right, raising real GDP and the price level in the short run. Production would rise to meet higher export demand, but this could also cause demand-pull inflation, leading to higher prices.
Step-by-step explanation:
When Ecoland experiences an increase in international demand for its copper exports, its aggregate demand curve shifts to the right. This shift indicates an increase in total spending on Ecoland's goods and services at every price level. As a result, in the short run, Ecoland's real GDP increases due to higher expenditure on copper exports, leading to a rise in production and thus an increase in economic output.
Alongside the increase in real GDP, there will also typically be an upward pressure on the price level. As demand for exports grows, firms may face constraints in meeting this demand immediately due to limited production capacity or the scarcity of resources required to produce more copper. This can lead to bidding up the prices of inputs, which ultimately translates into higher prices for the final goods, i.e., copper. Consequently, demand-pull inflation occurs, illustrated by a rise in the general price level within Ecoland.
This analysis mirrors examples observed in economies like Mexico, Japan, and Germany, as mentioned in the reference information, where increased net exports lead to rising real GDP and price levels. It's important to note that these effects are typical of the short-run; in the long run, continued pressure on aggregate demand can lead to sustained higher price levels rather than perpetual increases in output.