Externalities are defined as
a. any transaction external to the firm
b. costs or benefits that fall on third parties
c. policies that firms undertake to sell products outside the country
d. managers' dealings with stockholders outside the firm
e. costs of maintaining plant and equipment to avoid the scrutiny of external auditors
B
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Bank failures in the United States occurred
A. frequently through the 1960s and declined since then. B. infrequently through the 1960s and have become more common since then. C. frequently through the 1930s, declined after that time, and became more common in 2008. D. infrequently through the 1930s, increased after that time, and became less common in 2008.
In the expanded circular flow diagram, the rest of the world interacts directly with:
A. households. B. firms. C. product markets. D. factor markets.