When there is an inflationary gap

A) we are spending too much and taxes should be raised.
B) we are spending too much and taxes should be lowered.
C) we are spending too little and taxes should be raised.
D) we are spending too little and taxes should be lowereD.

Inflationary Gap

The difference between the actual output of an economy and the output it would produce if it were at full employment, indicating higher demand than supply, leading to inflation.

Taxes

Mandatory financial charges imposed by governments on individuals, corporations, and transactions to fund public expenditures.