If an economy is currently producing at point Er, then the economy is experiencing a(n) ________ gap, which the government can fix by ______________. LRAS, SRAS, and AD showing a recessionary gap A graph with price on the y-axis and real gross domestic product on the x-axis. It has an upward sloping short-run aggregate supply curve that starts flat on the lower left and gets stepper further to the right. There are two downward-sloping aggregate demand curves labeled ADf and ADr. ADf is above and to the right of ADr. ADf intersects short-rung aggregate supply at Ef and ADr intersects short-run aggregate supply at Er. Select the correct answer below: inflationary; shifting aggregate demand leftward inflationary; shifting aggregate demand rightward recessionary; shifting aggregate demand rightward recessionary; shifting aggregate demand leftward