Fill in the missing letters in the paragraph.
The number of underlines shows how many letters you need to fill in. You may answer with the full word or only the missing part.

Economic activity sometimes affects people who are not directly involved in a trans _ _ _ _ _ _ . For example, pollution from a factory may harm nearby resi _ _ _ _ _ , even though they are not part of the production process. Econ _ _ _ _ _ _ refer _ _  these unintended effects as externalities. When externalities exist, market outcomes may not reflect the true social co _ _ or benefit of an activity. As a re  _ _ _ _ , governments may introduce regu _ _ _ _ _ _ _ or taxes to reduce negative effects or encourage positive ones.