Answer:
Government tries to encourage positive externalities and limit negative externalities.
Explanation:
The microeconomic concept of externality consists of the explanation of the harmful or positive effects that an economic activity implies in the other economic agents. For example, coal production at the mills creates pollution that affects everyone. So pollution is a negative externality.
On the other hand, the positive externality occurs when the activity of a company or organization causes positive effects for society. For example, if an NGO acts in the treatment of addicts, acting in the place of the State, public money will remain in the hands of the government, which may be used in another area. This then is a positive externality.
Of course, governments act to curb negative externalities and stimulate positive externalities.
