What is an externality?
What will be an ideal response?
An externality is a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service.
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This textbook is about microeconomics because it deals mainly with the behavior of variables such as:
A. economic sectors, the business cycle and monetary and fiscal policies. B. national output, interest rates, unemployment and inflation. C.individual economic units, such as consumers, firms, workers and investors D.national and international markets, exchange rates and economic treaties.
If an American firm opens a production facility in India, the total value of the production will be included in the
A) gross domestic product of the United States. B) national income of the United States. C) gross domestic product of India. D) consumption of fixed capital for India.