Any cost or benefit generated by one agent in its production or consumption activities but affecting another agent in the economy is known as an externality.

Name: Any cost or benefit generated by one agent in its production or consumption activities but affecting another agent in the economy is known as an externality.
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This is the definition of an externality, as it refers to a cost or benefit that spills over from one agent to another in the economy.

Any Cost or Benefit Generated by One Agent in Its