Painting one s house is an example of a spillover benefit. Inflation - Inflation is an increase in the overall price level of goods and services, with a corresponding decrease in the purchasing power of money. The primary cause of inflation is an increase in the supply of money relative to the availability of goods and services. Fiscal Policy - Fiscal policy refers to the spending and taxing practices that the Federal government uses to achieve certain economic goals, especially economic growth and full employment. Comparative Advantage - Comparative advantage is the ability of a country to produce a specific good or service at a lower opportunity cost than its trading partners.
Comparative advantage is the basis for specialization and trade between countries.
An exchange rate is the price of one nation s currency in terms of another nation s currency.