Inflationary gaps occur when the actual level of real GDP is:

Inflationary gaps arise when the actual level of real GDP exceeds the full-employment level of GDP. This situation indicates that the economy is operating beyond its sustainable capacity, leading to upward pressure on prices due to increased demand for goods and services. When aggregate demand surpasses aggregate supply at full employment, it creates a scenario where resources may become over-utilized, causing businesses to raise prices to balance the excess demand. This phenomenon typically accompanies robust economic growth, but it can also lead to inflation if it continues over time.

Understanding the concept of full-employment GDP is crucial. It represents the output level at which all resources are efficiently utilized without generating inflationary pressures. Thus, when actual GDP is higher than this threshold, it signals an inflationary gap. Other options are incorrect because they either indicate conditions of underutilization of resources or equilibrium, which do not contribute to inflation.