In Figure 10.4: Figure 10.4 Graph - Downward sloping curve AD2 is to the right of downward sloping curve AD1; arrow points from AD1 to AD2; upward sloping SRAS curve intersects AD1 at YfP1and the LRAS curve is vertical at Yf; upward sloping SRAS curve intersects AD2 at Y2P2; Y2 is to right of Yf In Figure 10.4: there is a recessionary gap. to close the gap, short-run aggregate supply has to increase. the gap will be closed through more inflation. to close the gap, resource costs have to decrease