The adverse effects on the economy that can occur because of major disturbances to the special functions or services provided by financial institutions are negative externalities.

Question

Quizplus · Accepted Answer

Negative externalities refer to the unintended and negative consequences of economic activities on third parties who are not involved in the transaction. When financial institutions fail to provide their essential functions and services, such as lending and payment processing, it can have ripple effects on the economy and cause negative externalities.

The Adverse Effects on the Economy That Can Occur Because