Externalities Are Always Harmful to Third Parties

question 41

True/False

Externalities are always harmful to third parties.

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Definitions:

Agreement

A mutual arrangement between two or more parties, typically formalized by a contract outlining each party's obligations.

Agent Role

The function assumed by an individual or entity authorized to act on behalf of another (the principal), typically in business transactions.

Third Party

An entity that is not directly involved in a transaction or agreement but may be affected by it or play a role in its outcome.

Principal

The primary party involved in a financial transaction or agreement, often referring to the main amount of money borrowed or invested.