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How can insurance spread financial risk across a group?

An uncertain large loss for one person can become part of a wider pool of risks. Insurance connects that pooling with a contract and a premium, while the contract still determines which losses are covered.

3–7 min

Questions you could explore

  • Why does a shared shock pose a different problem from unrelated losses?
  • What is a simple risk pool unable to tell us about a real policy's price or coverage?

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Economics and money

Why can Ireland’s inflation rate differ from your shopping bill?

A national price index combines many purchases that no single household makes in exactly the same proportions. Ireland's Consumer Price Index uses spending weights, so changes in different prices contribute unequally to the overall figure.

4–5 min

Why can Ireland’s inflation rate differ from your shopping bill?

Economics and money4–5 minA national price index combines many purchases that no single household makes in exactly the same proportions. Ireland's Consumer Price Index uses spending weights, so changes in different prices contribute unequally to the overall figure.

Economics and money

What does a free afternoon still cost you?

An hour can be free of charges and still be scarce. Choosing one use means giving up the best available alternative, which is the opportunity cost even when no money changes hands.

3–5 min

What does a free afternoon still cost you?

Economics and money3–5 minAn hour can be free of charges and still be scarce. Choosing one use means giving up the best available alternative, which is the opportunity cost even when no money changes hands.

Economics and money

Why does compound interest differ from simple interest over time?

Interest can become part of the amount that earns the next round of interest. Under a stated constant rate, that repeated calculation follows a different path from adding the same amount each period; a hypothetical path is not a forecast.

3–7 min

Why does compound interest differ from simple interest over time?

Economics and money3–7 minInterest can become part of the amount that earns the next round of interest. Under a stated constant rate, that repeated calculation follows a different path from adding the same amount each period; a hypothetical path is not a forecast.

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