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Economics 101: Macroeconomic Externalities | SterlingTerrell.net

Economics 101: Macroeconomic Externalities



What are macroeconomic externalities?

Macroeconomic Externalities are externalities upon the economy as a whole.

This is where decisions can be made that impact others.

A great example of a macroeconomic externality is the minimum wage.

Politicians and voters with great intentions increase the minimum wage.

But that is not the end of the story.


An externality of minimum wage laws is unemployment.