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: to close the gap, prices and wages have to fall. the disturbance came from the supply side of the economy. prices and wages would fall faster than rise. the gap will be closed through a stagflationary period in the economy where GDP falls and inflation increases