An externality:
A)can only be positive
B)is the effect of one person's actions on the wellbeing of a bystander
C)is the external forces that increase the growth of GDP in a country
D)none of the above

Question

Quizplus · Accepted Answer

An externality refers to the impact of one person's actions on the wellbeing of a bystander. It can be either positive or negative. Option A is incorrect as an externality can be negative too. Option C is incorrect as it refers to external forces that increase GDP growth, but it does not necessarily involve the impact on the wellbeing of bystanders. Therefore, the correct answer is B.

An Externality