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Economy

Definition of 'True Cost Economics'


Definition: True cost economics is an economic model that includes the cost of negative externalities associated with goods and services.

Description: If the prices of goods and services do not include the cost of negative externalities or the cost of harmful effects they have on the environment, people might misuse them and use them in large quantities without thinking about their ill effects on the environment. Therefore, environmentalists support true cost economics to counter the impact of negative externalities.

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