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First-order effects are the immediate consequences of an action or decision, often straightforward and predictable. Second-order effects are the indirect outcomes that arise from the first-order effects, which may not be immediately apparent and can lead to more complex dynamics. Third-order effects are the further ramifications that stem from the second-order effects, often creating a ripple effect that can significantly alter the original context or environment. Understanding these layers helps in analyzing the broader implications of decisions in various fields, including economics and policy-making.

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