(a) Using a graph showing aggregate demand, short-run aggregate supply, and long-run aggregate supply, illustrate an economy that faces an inflationary gap. 
(b) Explain how the inflationary gap can be eliminated and evaluate the possibilities.
Definitions:
Cost-Plus Approach
A pricing strategy where a fixed percentage or amount is added to the cost of producing a product or service to determine its selling price.
Estimated Costs
Projected expenses or costs that are predicted in advance of actually incurring them, often used for budgeting and planning purposes.
Yield Pricing
A strategy in price management where prices are adjusted based on demand to maximize revenue.
Differential Analysis
A financial technique used to evaluate decisions by examining the costs and benefits of alternative actions and their impacts on company finances.
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