If potential output is less than actual output, eventually the short-run aggregate supply curve will shift:
up and eliminate the recessionary gap.
down and eliminate the recessionary gap.
up and eliminate the inflationary gap.
down and eliminate the inflationary gap.
In this case, input prices will be bid up, raising production costs and forcing firms to increase output prices. As this occurs, the short-run aggregate supply curve shifts up.
up and eliminate the inflationary gap.