MANAGEMENT

Detailed explanation-1: -Economic risk may result in gain or loss because of changing economic conditions. Factories begin laying off workers during the decline period of the business cycle. In the business cycle, the trough is followed by recovery. The three major insurable risks are pure, economic, and speculative.

Detailed explanation-2: -Economic risk can cause the downfall of not just the business but the whole market. Although economic risk can be mitigated, it cannot be negated entirely. Economic risk impacts international trade and has the potential to create a lasting effect on the business activities of all participants.

Detailed explanation-3: -Risk is the potential of gaining or losing something of value. Values (such as physical health, social status, emotional well-being, or financial wealth) can be gained or lost when taking risk resulting from a given action or inaction, foreseen or unforeseen.

Detailed explanation-4: -The economic risks may include exchange rate fluctuations, a shift in government policy or regulations, political instability, or the introduction of economic sanctions.