4. What is an externality. Milton Friedman describes it as the effect of a transaction between two parties on a third party who is not involved in the transaction. A technical sounding term that basically means let somebody else deal with the problems the corporation creates. 4. What is an externality. Milton Friedman describes it as the effect of a transaction between two parties on a third party who is not involved in the transaction. A technical sounding term that basically means let somebody else deal with the problems the corporation creates. Show Less >>
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