Fiona shares an office with her ex-husband. Her share of the rent and utilities is 625 per month. She is considering moving to a home office which she will not have to share with anyone.
The home office will not cost her anything as far as extra rent or utilities. Recently, you ran into Fiona at the gym and she tells you that she has moved into her home office. Fiona is as rational as any other person. As an economics major, you rightly conclude that
A) Fiona did not have a choice; her ex-husband was a jerk.
B) Fiona figures that the benefit of having her own office (as opposed to sharing) is zero, since she is no longer paying rent and utilities.
C) Fiona figures that the additional benefit of having her own office (as opposed to sharing) is at least 625.
D) The cost of having one's own space outweighs the benefits.
Question 2
How does contractionary monetary policy affect net exports in the short run?
A) Contractionary monetary policy reduces exports and increases imports.
B) Contractionary monetary policy increases exports and reduces imports.
C) Contractionary monetary policy increases exports and increases imports.
D) Contractionary monetary policy reduces exports and reduces imports.
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