As Long as the FE Curve Is Vertical, Internal and External

question 5

True/False

As long as the FE curve is vertical, internal and external balance can be achieved by using the appropriate mix of monetary and fiscal policy.

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Definitions:

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as production of a good or service) more efficiently than another activity.

Opportunity Cost

The loss experienced from bypassing the following superior alternative in the course of decision-making.

Capital

Refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the tangible machinery and production equipment used in environments such as factories.

Corporate Bond

A debt security issued by a corporation and sold to investors, promising to pay back with interest at a future date.