Externalities Are

question 102

Multiple Choice

Externalities are:

• A)external forces that help establish equilibrium price
• B)external forces that cause the price of a good to be higher than it otherwise would be
• C)side effects of government intervention in markets
• D)side effects passed on to a party other than the buyers and sellers in the market

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Definitions:

Third Party

A third party is an entity that is neither the principal nor the counterparty in a transaction, agreement, or legal case but may have an interest or be indirectly involved.

Guaranty Contract

A legal agreement wherein a guarantor agrees to fulfill the obligations of a debtor to a lender, should the debtor fail to do so.

Creditor

An entity (person or institution) that lends money or extends credit to another entity, with the expectation of being repaid in the future.

Debtor's Debt

Debtor's debt refers to the monetary obligation owed by a debtor to a creditor, resulting from a loan or another credit agreement.