ECONOMICS TODAY: THE MACRO VIEW >CUSTOM
ECONOMICS TODAY: THE MACRO VIEW >CUSTOM
19th Edition
ISBN: 9781323850831
Author: Miller
Publisher: PEARSON C
Question
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Chapter 32, Problem cFCT
To determine

Why do the heightened risk about gains or losses from market transactions is less than increased uncertainty to induce people to stop trading in the affected market?

Concept introduction:

Uncertainty is a potential, unpredictable, and uncontrollable outcome; Risk is an outcome of move made notwithstanding vulnerability. Risk observation is the subjective judgment individuals make about the seriousness and likelihood of a hazard, and may differ from individual to individual. In this way, to put it plainly, risk depicts a circumstance, in which there is a shot of misfortune or peril. On the other hand, uncertainty alludes to a condition where you don't know about the future results.

Basis for Comparison Risk Uncertainty
Meaning The probability of winning or losing something worthy is known as risk. Uncertainty suggests a circumstance where the future occasions are not known.
Ascertainment It can be measured It cannot be measured.
Outcome Chances of outcomes are known. The outcome is unknown.
Control Controllable Uncontrollable
Minimization Yes No
Probabilities Assigned Not assigned

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