Economics

Economics

basics of economics

Contributors in Economics

Economics

The controversial idea, suggested by David Ricardo, that government deficits do not affect the overall level of demand in an economy. This is because taxpayers know that any deficit has to be repaid ...

risk

Economy; Economics

The chance of things not turning out as expected. Risk taking lies at the heart of capitalism and is responsible for a large part of the growth of an economy. In general, economists assume that ...

risk averse

Economy; Economics

Someone who thinks risk is a four-letter word. Risk-averse investors are those who, when faced with two investments with the same expected return but two different risks, prefer the one with the ...

risk management

Economy; Economics

The process of bearing the risk you want to bear, and minimizing your exposure to the risk you do not want. This can be done in several ways: not doing things that carry a particular risk; hedging; ...

risk neutral

Economy; Economics

Someone who is insensitive to risk. Risk-neutral investors are indifferent between an investment with a certain outcome and a risky investment with the same expected returns but an uncertain outcome. ...

risk premium

Economy; Economics

The extra return that investors require to hold a risky asset instead of a risk-free one; the difference between the expected returns from a risky investment and the risk-free rate. (See equity risk ...

risk seeking

Economy; Economics

Someone who cannot get enough risk. ¬Risk-seeking investors prefer an investment with an uncertain outcome to one with the same expected returns and certainty that it will deliver them.