A recessionary gap occurs when real GDP is less than potential GDP and which brings a falling price level. A recessionary gap occurs when the SRAS (Short Run Aggregated Supply) curve and the AD (Aggregate Demand) curve intersect to the left of the potential GDP line. An inflationary gap is a macroeconomic phenomenon that measures the difference between the current level of real GDP and the GDP that would exist if an economy was operating at full employment. The Demand-pull inflation is inflation that starts due to aggregate demand increases. The Demand-pull inflation can be started by any of the factors which increase aggregate demand, but can only be sustained by growth in the quantity of money. The Cost-push inflation is inflation which begins with an increase in cost. The two major sources of cost increases are increases in the money wage rate & increases in the money prices of raw materials, like oil.