Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Each firm will produce

Entitlement spending:

A. is public expenditure that is mandated and regulated by permanent laws. B. rises and falls with the number of people who are eligible recipients. C. cannot be reduced without changing the laws outlining eligibility. D. All of these statements are true.

According to the real business cycle theory, which of the following would be a real disturbance to the economy?

A. increase in the labor force B. reduction in the money supply C. change in the required reserve ratio D. increase in the price level