What is an externality? How are positive externalities different ...

[dollx]

What is an externality? How are positive externalities different from negative externalities?
 
  What will be an ideal response?

Question 2

If the Fed increases interest rates, other things remaining the same, foreigners demand ________ dollars, thereby ________ the exchange rate.
 
  A) more; decreasing
  B) fewer; increasing
  C) the same number of; not affecting
  D) fewer; decreasing
  E) more; increasing

[flannelavenger]

Answer to Question 1

An externality is a by-product of an activity that hurts or helps someone who is not involved in that activity. A negative externality imposes a burden or cost on others. A positive externality confers benefits on others.

Answer to Question 2

E

[dollx]

Wow, this really help

[raili21]

Thanks for the timely response, appreciate it