A Barrier To Economic Activity
When this reaction against the doubts carried over into business affairs, it can hamper economic activity. That is, if the majority is aiming at choosing liquidity (cash holding) because the future will be doubted, then request the investment will slump. If this downturn is not offset by the increase in demand for investment in other sectors, then the economy as a whole also slumped.
When people worry and doubt would be his future, then they tend to hold more assets in cash than invest it into a production machine that will load the more efficient operation of his company. Another bad influence of the doubt against production is that the workers are worried or concerned was not as productive as those that he feels more secure. Anxiety does not only increases the cost because he caused the accident on the job. Employees who worry tend not to care. Risks and doubts that it can make clear the economic and psychological costs requested.
Types Of Risks
Risks can be classified into:
speculative risks and,
-pure Risk.
Genesis indeed sometimes deviate from the estimate (expectations) to one of the two directions. That is, there is a possibility of beneficial deviations and irregularities detrimental. If both possibilities exist, then we say that the risks of a speculative nature. Example, gambling raises possibilities. Those who gamble may win or lose. The purpose of shill is not to lose or maintain the status quo, but to win. Similarly, someone who bought shares expecting a rise in its stock price so fix the Financials. With a transaction that it is open to two possible i.e. profit or loss. A risk is the possibility of a loss but if in addition to the possibility of harm there is also the possibility of profit, then the risk of it called speculative risk.
The opposite of speculative risk is the risk that there is only pure possibility of loss. An owner of the House open to the possibility of losses due to fires. This risk is simply have the possibility of losses and had no possibility of profit. This risk is called risk. Because only moves one direction only, namely towards the possibility of loss.
The importance of this type. Any economic venture was full of risks, both speculative risks as well as risks. Although the requirement of a risk it is not always clear, but the most risks can be classified. Whether a risk is it speculative or pure, depending on the approach used. Speculative risks cannot be insured. Just pure risk can be insured. Insurance is the main tool for people who are open to the possibility of pure risk.
Pure risk in the face of a person, family, companies and other organizations can classify into personal risk, the risk of property, liability and risk to sue. Personal risk is the risk of possible loss over that person such as death or disability. The risk is the risk of property losses on property such as car theft. The risk of liability to sue is the possibility of legally responsible to pay for damage to the person or others.
