A Situation in Which a Private Cost Diverges from a Social

question 185

Multiple Choice

A situation in which a private cost diverges from a social cost is

• A) internal costs.
• B) an externality.
• C) an internality.
• D) a transactions cost.

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Definitions:

Consolidated Financial Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries into one document, presenting the financial position and results of operations of the entire group as a single entity.

Held-To-Maturity Securities

Financial assets purchased with the intention and ability to hold them until a specific maturity date.

Trading Securities

Financial instruments bought and held primarily for selling them in the near term with the aim of generating profit on short-term price differences.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return, used to assess the worth of future cash flows today.