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externality
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   Also found in: Dictionary/thesaurus, Medical, Wikipedia 0.01 sec.

externality

The difference between the social cost or benefit of an economic activity and its private cost or benefit. For example, if a company pollutes the atmosphere but pays nothing to the government or the community for this, then the pollution becomes an externality.



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Externalities aside, the desirability of partly financing government through alcohol taxes depends on the economic costs of alcohol taxes compared with other taxes, such as income and payroll taxes.
These externalities are treated as rare occurrences in economic theory, but the reality of the business world is that external effects of our actions are everywhere.
In the existing models with sector-specific externalities or distorted factor taxes, there is either no government spending or, if the government spending is taken into account, only consumptive public spending and government transfers are considered.
 
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