How households and government deal with risk of income loss (negative shocks to income).

a) What three types of risks are faced by households that result in a loss of income due to job loss? b) How can households on their own deal with the risk of job loss and hence lost income?

c) What three general types of policies does the government use to help households deal with the risk of a loss of income due to job loss? Give a brief explanation of each type of policy.