Externalities Are Unintended Costs or Benefits That Are Imposed on Unsuspecting

question 155

Multiple Choice

Externalities are unintended costs or benefits that are imposed on unsuspecting people and that result from:

• A) poor planning.
• B) intentional damages.
• C) excessive costs.
• D) excessive losses.
• E) the economic activity of others.

---

Definitions:

Equity Securities

Financial instruments representing ownership interest in a corporation, such as stocks.

Debt Securities

Financial instruments representing a loan made by the investor to the issuer, which can include government bonds, corporate bonds, and other types of debts.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, recorded in the cash flow statement.

Financing Activities

Transactions related to raising capital, repaying loans, and paying dividends, reflecting in the cash flow from financing section of a firm's cash flow statement.