Answer: The correct answer is "4. when a third party is injured by an economic activity".
Explanation: A negative externality is when a third party is injured by an economic activity.
Negative externality refers to all kinds of harmful effects on society, generated by production or consumption activities, which are not present in its costs. Negative externalities occur when the action taken in our activities as a company, individual or family causes harmful side effects to third parties. Such effects are not incorporated in all costs. Since the highlighted negative effects are not present in the price of production or of the profit when consuming.
<span>This behavior trend where a consumer spends money on homes to make it pleasurable environment is called as cocooning. Cocooning means staying in a protective and comfortable way or place. It even means hiding yourself from real world which may not always be a ideal place.</span>
The key movements via are to increase the economy consist of a decreased bargain fee, buying government securities, and a decreased reserve ratio.
<h3>When the Fed makes use of contractionary policy?</h3>
When GDP in a kingdom is growing too fast, inflicting inflation to grow past a suited charge of two%, central banks will put in force a contractionary economic coverage. The Federal Reserve, or any principal financial institution, has three primary pieces of equipment to reduce the money supply.
A direct advantage of contractionary economic coverage is that it strengthens government budgets. As an instance, whilst the Fed's bargain price increases, the government earns extra cash from the banks that borrow budget from the Fed's cut price window. The government can use this supply of sales to offset spending and decrease price range deficits.
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Answer:
Variance =0.008464
Explanation:
The probability that there will be recession = 100 – 80 = 20%
Therefore expected return = Return × probability
=(0.8 × 14.3) + (0.2 × -8.7)
= 9.7%
Total probability is calculated in the table (use the attached table)
Standard deviation (SD) = [Total probability (84.64%) × (Return (8.7%) - Expected Return (14.3%))^2 / Total probability (84.64%) ]^(1/2)
=9.2%
Thus, variance = (SD)^2
variance =0.008464
<u>Explanation:</u>
I would recommend Jamie Lee to use consolidating of her debt such as the credit card bills and taking personal loans only when she has a regular income and creditworthiness. She should also be able to payback her debts quickly and on time. If the interest rates offered by the company are lower for consolidated debt then she can choose this method to reduce her interest payments.
The debt management companies do not pay off her loans but they manage the funds through escrow account. On non payment it will result in diminishing personal credit score. Debt consolidation can be kept as the last resort when she is out of options to pay her debts.