Refer to the above figure. Suppose the relevant aggregate demand curve is AD2. If the government wants to use fiscal policy to close the existing gap, it should

The short run supply curve for a perfect competitive firm is

a. Marginal cost curve b. Average revenue curve c. Marginal revenue curve d. Marginal cost curve above its average variable cost curve

If the government provides a subsidy in one industry and raises the tax revenue by taxing another industry, would, other things equal, cause welfare costs in both industries

a. True b. False Indicate whether the statement is true or false