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Most Drivers Have Dangerous Habits
Most Drivers Have Dangerous Habits
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Outline
Thesis: Unless the dangerous habits of most of today’s drivers are addressed, they will still be responsible for the rising loss of lives and destruction of property
Incidences of risky driving are on the rise. They can be experienced on highways, packing lots and so forth.
Both the young and old are victims of this bad behavior
This has been caused by various factors
Use of cell phones
Eating while driving
Applying make up while driving
Road rage
Most of today’s drivers have dangerous habits
It is an obvious observation, even to those who are not keen on drivers that today’s drivers have very dangerous driving habits. It is not even necessary for someone to travel very far to notice the widespread risky driving behaviors. These risky driving habits can be seen on residential streets, highways and even parking lots. Risky driving habits not only endanger the reckless driver but also the public. Many cross paths with such drivers and many leave unscathed while some don’t survive. Risky driving habits cause death and leads to destruction of property every day. It is on this basis that the insurance companies lay their claim for increasing the cost of insurance on automobiles.
The reckless drivers are from all age groups. The young people lack experience necessary for driving in various environments which include driving along interstate highways and driving at night and for this reason they end up becoming dangerous drivers. The older people on the other hand may have lost sharp sense and reflexes to old age and thus end up driving recklessly.
The technological growth has also led to the skyrocketing of reckless driving habits. The use of cell phones is now very popular and almost every driver owns a cello phone. Walking around or driving on the highway or in town, it’s a common sigh to see people driving at the same time talking on the cell phone. Such a habit has a very high probability of making someone loose he focus on driving and taking it to the conversation depending on what the conversation is about (Mika 97). Another habit that is leads to reckless driving is applying make up as one is driving. This is so irresponsible of the driver because it is something that could be avoided by being organized as a person. Another common reckless driving habit is eating as one drives. People running to catch up with time on some urgent matter don’t have time to sit and eat and they carry food from the restaurants which they eat as they drive to attend their urgent matters. All these reckless driving habits cause a driver to be distracted and he doesn’t give attention to other vehicles on the road or the road conditions.
From the category of distractive driving behaviors there is also another category that includes failing to use the turn signals which when properly used prevents most accidents. These turn signals are simply devices which gives drivers a notice in advance about the driving intentions. Failure to use these signals in an appropriate manner increases the rate of accident with the pedestrians and other vehicles. It is very unfortunate and irresponsible that failure to use a simple device can cost lives as well as lead to destruction of property. One of the consequences of failure to use turn signals is road rage. Many drivers who barely escape an imminent accident due a driver failing to use a turn signal to notify them of the intentions to make a turn or change a lane, they become so enraged, a situation called road rage which can turn out to be dangerous too (Chambers 47).
A common cause of dangerous driving habits is overconfidence. Drivers who have experience of many years can become reckless drivers because of over confidence in them when it comes to particular route or vehicle. Most of the times they are not prepared when something that is not ordinary comes in the way.
With the increased rate of road accident and the many lives that are lost as result it is time that driver changed and started being responsible driver. From a moral point of view these accidents would not remain to be called accident but deliberate action if drivers don’t take a giant step in changing the habits they see as normal when driving. Reckless Drivers should be aware that it is they are to blame for the deaths and property destruction because such good drive habits could be achieved by putting a little personal effort and determination. A saying goes that good habits are as hard to break as the bad habits so if the drivers try good driving habits for just a few weeks, these good habits becomes their new habits and thus hard to break.
Works Cited
HYPERLINK “http://www.google.co.ke/search?tbo=p&tbm=bks&q=+inauthor:%22Alliance+of+American+Insurers%22&source=gbs_metadata_r&cad=8″Alliance of American Insurers, HYPERLINK “http://www.google.co.ke/search?tbo=p&tbm=bks&q=+inauthor:%22American+Mutual+Insurance+Alliance%22&source=gbs_metadata_r&cad=8″American Mutual Insurance Alliance. Journal of American Insurance. United States: Alliance of American Insurers, 2006
HYPERLINK “http://www.google.co.ke/search?tbo=p&tbm=bks&q=+inauthor:%22William+Chambers%22&source=gbs_metadata_r&cad=8” Chambers, William. HYPERLINK “http://www.google.co.ke/search?tbo=p&tbm=bks&q=+inauthor:%22Robert+Chambers%22&source=gbs_metadata_r&cad=8″Chambers, Robert. Chambers’s journal, Volume 6. United States: Orr and Smith, 2006
HYPERLINK “http://www.google.co.ke/search?tbo=p&tbm=bks&q=+inauthor:%22Mika+Hatakka%22&source=gbs_metadata_r&cad=6″Mika, Hatakka. Novice drivers’ risk- and self-evaluations. United States: Turun yliopisto,2003
Money is defined as any circulating medium of exchange
QUESTION 1
Money is defined as any circulating medium of exchange. Money allows people to obtain what they need. It being an economic unit that facilitates transactions. Money provides a service of reducing double coincidence of wants. Money is also referred to as currency. It is a liquid asset. Money functions generally on acceptance of the value it holds, within an economy and foreign exchange.
Most of the money circulating in a country’s economy is created by banks. This money is in form of bank deposits. Banks rarely makes paper money, instead they create electronic money deposit. Banks also create money through accounting, which they use to make loans. Every new loan a bank makes creates new money. If central bank of a country wants to increase the amount of money in circulation, they may opt to print it. The central bank may also opt to buy government’s fixed income securities in the market. This puts money in market place, hence in the public’s disposal. Central banks also lower the interest rates, which makes banks to offer low interest loans encouraging individuals and banks to borrow.
Central bank is an independent national authority that currency within a country or in a formal monetary union. The central bank acts as a lender of the last resort during a time of financial crisis. Central banks control the activities of the member institutions. These institutions are also independent from political interference.
The central bank has the following roles:
Regulating members: Central banks are responsible in ensuring that there is financial stability for the members by covering them from potential financial losses. Central banks also split large banks so that they are not too big to fail. The central banks also warns members of the risks that can affect the entire financial industry.
Provision of financial services: Central banks lend money to their members. Whenever a member is in financial difficulty, central banks lend money to the member in need ensuring survival.
Central banks also store currency in the foreign exchange reserves. This currency is used in exchange rates. In doing this central banks can control inflation.
Central bank also acts as a banker and adviser of the government. The central bank makes and receives payments on the behalf of the government. It also provides short-term loans to the government to assist in difficulties. It also manages public loans on behalf of the government. It also keeps banking accounts on its behalf.
The central bank is the custodian of all cash reserves. All the commercial reserves are advised to keep their cash with commercial bank. Members can use this amounts in times of need. This centralized cash reserves also act as a basis for provision of large more elastic credit structures.
Control of credit: as commercial banks create a lot of credit, which can result in inflation, Central banks control this credit. Since money and credit play an important role in determining the income levels, fluctuations happen in expansion and contraction of currency. This fluctuations cause credit.
Bank of issue: the central bank has the monopoly of note issue. It prints currency notes and issues them and they are declared legal tender in a country. The central bank has full control of the currency supply and keeps all the gold, silver or other securities against the bank notes issued.
QUESTION 2
The aggregate demand and aggregate supply model is applied when building a useful macroeconomic model. In order to determine total supply and total demand for economy and how they interact at macroeconomic level.
Aggregate Supply
Aggregate supply is the amount of goods and services produced in an economy in a given period.
Aggregate demand
Aggregate demand is a concept used to show the total demand for goods and services in an economy
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Macroeconomic problems include.
Unemployment
Inflation
Potential solution
Monetary policy refers to policies implemented by central bank that regulate the quantity of money and credit in the economy, while fiscal policy refers to the decisions made by the government about taxes and expenditure. These policies play a major role in solving macroeconomic problems like.
Both fiscal and monetary policies can be applied to revive an economy to full employment
Fiscal policy and monetary policy can be used to restore the economy if it is experiencing a severe recession. This can be solved by expansionary of the fiscal policy in order to increase aggregate demand. The central bank always play the role by engaging in expansionary of monetary
Fiscal and monetary policy can impact output, inflation, unemployment, and interest rates
For instance, let us assume a government has increased its spending. Hence, the expansionary of fiscal policy could lead to increase in aggregate demand hence leading to reduced unemployment and higher inflation
Monetary policy can be used to moderate the impact of fiscal policy on interest rate
Money growth and inflation
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Money growth and inflation
Introduction
Allan Meltzer, a great economist, made an observation that most staffs of Central Bank, majority of working economists as well as market practitioners hardly make use of money growth for prediction of inflation and that most of them rely on a theoretical relations or the Phillip’s Curve. The perception that growth of money is entirely not relevant for inflation is quite surprising. One of the ancient and most held economics propositions is the idea which suggests that persistent variations in level of prices are directly linked with money supply. Several economists have repeatedly observed that continuous increase in prices of goods is directly attributed to the nominal quantity of money.
This essay will major on the subject of money growth and inflation. For instance, it will analyze economic news reports like the News Release by the Bank of England which sought to establish the role played by monetary policy regarding Inflation and Growth.
Discussion
Monetary inflation is an economic terminology that refers to sustained rise in the supply of money in an economy of any given country. It normally leads to price inflation, that is, general increase in price levels of products. Economists generally agree that there exists a causal relationship between the demand and supply of money, as well as prices of services and goods often quantified in monetary terms. However, there is no overall consensus pertaining the exact relationship and mechanism between monetary inflation and price inflation. There is a sophisticated system and various arguments put forward towards the issues that are involved, for instance how accurately determine monetary base, and or how other factors like money velocity impact the relationship and the most appropriate monetary policy.
Review of previous literature shows that price levels and nominal money quantity variations are closely interwoven. Although the debate has been going on for long with substantial evidence being given, there still remains some dispute between the predicted link between inflation and money. One of the possible explanations given towards this is that the said relationship holds only over periods of time which are so long thus making the relationship uninformative for policymakers and practitioners, who concern themselves with inflation in the future, say like the next five months or a year. However, the said relationship can not be overlooked because it has been backed with substantial evidence. Economists have to make monetary policies bearing in mind this consideration.
Monetary policies have to play significant roles in enhancing economic growth and development in any economy. Spenser Dale, when addressing the Chinese Business Association and Asian Business Association of London Chamber of Commerce and industry, gave out his opinions regarding the monetary policy objectives. Particularly, Dale considered the monetary policy’s flexibility to support employment and growth and also control inflation. He also considered the possibilities of presently having scope for additional growth without creating extra price inflation. Spencer welcomed the present interest in such crucial issues, and noted that the financial crisis was partly associated with failure of the monetary policies. In many nations like the UK, monetary policies failed to activate the growth people longed to have.
Some players have often asked if the UK’s regime that targets inflation does force the MPC to emphasize too much on inflation, instead of supporting growth recovery. In tackling this, Spenser noted that from its generation the core mission of MPC was to hit a target of 2% inflation, but in manner that it will support employment and growth. The MPS, he explained, has always done achieved that and brought recovery after the economic financial crisis aftermath. According to his report, Consumer Price Index (CPI) has been over the set 2% target for majority of the past five years with and over the same period, Bank Rates were cut to 0.5% all the way from 5%. He went on to explain that there had been launched a special scheme for funding entrepreneurs through lending as a way of stimulating growth in the economy through availing credit. Spencer noted that it is because of credibility that monetary policies got the flexibility for supporting the real economy.
Other people have asked if the setting of policy of the MPC has actually not been adequately based on inflation, that the aim is a “sham”. To this, Spenser noted that the flexibility that MPC’s remit allowed is dependent on the bottlenecks that inflation has to be taken back to the set target and this is to be done in such a manner which maintains credibility of the target. As such the target is a crucial anchor rather than a sham. And should this credibility be lost, the challenge on supporting employment and growth will be much more tightly binding some years to come. Low inflation provides the means to sustained economic growth and thus improved standards of living. It should therefore be a concern of the makers of monetary policies to evaluate their actions implications towards the real economy- for the strengthening of employment and output growth. It is therefore enticing and seductive to argue that it is possible to have the economy grow without significant rise in inflationary level.
Conclusion
However, it is not economically justifiable by the inflation behavior about ignoring growth of money in attempts to predict future inflation. A proportional relationship that is positive between money and price level relative to real income has been found to be consistent with literature review from previous researchers in this subject. The relationship between money growth and inflation is evident in data that has been made available for long periods of time as well as over shorter durations for many nations. In the United States, the divergence between money growth and price level relative to income in the early 1990s looks to be transitory in nature and it is not unusual especially when view is made in a longer perspective. To adhere to economic goals of fostering growth and employment through proper utilization of resources, emphasis is made that monetary policies have to factor in the relationship between money quantity and inflation. Although some inflation is necessary for economic growth, it should consider the living standards of citizens.
Work cited
Leamer, Edward E., 1985. “Vector autoregressions for causal inference?,” Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 22(1), pages 255-304, January.
Granger, C W J, 1969. “Investigating Causal Relations by Econometric Models and Cross-Spectral Methods,” Econometric a, Econometric Society, vol. 37(3), pages 424-38, July.
Stanley Fischer, 1993. “The Role of Macroeconomic Factors in Growth,” NBER Working Papers 4565, National Bureau of Economic Research, Inc.
Fischer, Stanley, 1993. “The role of macroeconomic factors in growth,” Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.