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Supply and Demand Fundamentals — Externalities
Economic actions often create costs or benefits that spill over onto third parties who are not part of the transaction — these are externalities. This module covers negative externalities (pollution, systemic risk), positive externalities (education, innovation), why they cause market failure, and how governments use taxes, subsidies, and regulation to correct them. Understanding externalities is essential for ESG investing and regulatory risk analysis.
⏱ 15 minModule F1.9
// What you'll learn
- Economic actions often create costs or benefits that spill over onto third parties who are not part of the transaction — these are externalities.
- This module covers negative externalities (pollution, systemic risk), positive externalities (education, innovation), why they cause market failure, and how governments use taxes, subsidies, and regulation to correct them.
- Understanding externalities is essential for ESG investing and regulatory risk analysis.
// Full access
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