Fill in the blanks to make the following statements correct.

a. When actual GDP is higher than potential GDP, we say that there is \(a(n)\)________ gap. When actual GDP is less than potential GDP we say there is a(n) _________ gap.

b. An inflationary gap leads to excess demand for labour, which causes wages and thus ______ costs to rise. Firms require higher _________ in order to supply any level of output, and so the \(A S\) curve shifts _________.

c. A recessionary gap leads to excess supply of labour, which tends to cause wages and thus _______ costs to fall. Firms reduce _________for any level of output supplied, and so the \(A S\) curve shifts ___________.

d. The downward adjustment of wages in response to a recessionary gap is much ________ than the upward adjustment of wages in response to \(a(n)\) ________ gap. Economists refer to this phenomenon as _________.