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When Externalities Exist,what Do Buyers and Sellers Do and How

question 23

Multiple Choice

When externalities exist,what do buyers and sellers do and how do their actions affect market equilibrium


Definitions:

Interest Semiannually

The payment of interest two times per year on a loan or bond.

Bond Covenant

Legal agreements between bond issuers and bondholders that specify terms and conditions to protect the interests of both parties.

Sinking Fund

A savings fund accumulated over time for the specific purpose of paying off a debt or replacing a capital asset in the future.

Bond Issue

The act of a borrower issuing bonds to raise funds from investors who will be repaid at a later date, typically with interest.

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