Negative Externalities That Come from the Production of a Good

question 20

Multiple Choice

Negative externalities that come from the production of a good

• A) create an increase in the supply of the good.
• B) create an increase in the demand for the good.
• C) create a decrease in the demand for the good.
• D) impose costs on third parties.
• E) impose benefits on third parties.

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Definitions:

Discount Rate

An interest rate that the Federal Reserve charges banks for short-term loans, influencing economic activity by setting the cost of borrowing money.

Cash Discounts

A reduction in the invoice price offered by sellers to buyers for prompt payment of their bill.

Interest Days

The number of days over which interest is calculated on a loan or investment.

Non-Interest-Bearing Note

A financial instrument that does not accrue interest over time, meaning the borrower pays back only the principal amount borrowed.