Which of the following statements about inflationary gaps and their effects on unemployment are true? Select all that apply.

An inflationary gap happens when the economy is producing more goods and services than it can sustain in the long run, usually because demand is very high. This situation can lead to lower unemployment in the short term, as businesses need more workers to keep up with demand. However, as companies hire more people and overproduce, they may eventually face increased costs, which can lead to higher prices or inflation. For example, if a bakery is selling more bread than usual, it might hire extra staff, reducing unemployment, but if it keeps raising prices to cover costs, this can hurt customers in the long run. Therefore, while an inflationary gap can temporarily lower unemployment, it can also create problems like inflation that affect the economy negatively over time.