In economics, _____ are the unintended side effects of a transaction that impact third parties not involved in the exchange. They can be either positive, such as the societal benefits of education, or negative, like the environmental costs of pollution.

In economics, externalities are the unexpected effects that happen as a result of a transaction, affecting people who are not directly involved in that exchange. For example, when a factory produces goods, it might create jobs and boost the local economy, which is a positive externality. However, if that factory also releases pollution into the air, it can harm the health of nearby residents, which is a negative externality. These effects show how one person's actions can influence others in ways that are not reflected in market prices. Understanding externalities helps us recognize the broader impact of economic activities on society and the environment.