Risks are a part of our everyday lives. Losses from risks and missed opportunities affect everyone. In the last two decades the world has experienced international integration, technological innovation, and economic reform, but also financial turbulence and environmental damage. The fear of loss can prevent people from pursuing development opportunities, leaving many poor people trapped in poverty. However, societies that successfully adapt to risks can make dramatic gains in their living standards. In this module you will examine the enabling foundation that the macro-economy provides for other economic activities, and the circumstances in which this function can be counterproductive. The module stresses the vital responsibility of the state in managing the macro-economy through macroeconomic policies and the importance of generating sustainable resources for long-term development.