Answer: b). Intersect to the right of Natural Real GDP.
Explanation: Inflation is a persistent increase in the general price level of goods and services in an economy over a given period of time.
Inflationary gap describes the difference between the current level of real gross domestic product and the anticipated GDP that would occur if an economy is at full employment.
An inflationary gap however exists when aggregate demand (AD) and short run aggregate supply (SRAS) intersect to the right of natural real GDP.
