Interest Rate Changes in Construction Activity Essay

Interest Rate Changes in Construction Activity - Essay Example Generally the construction activity is sensitive to changes in the interest rates and business cycles in the short term and to population growth and economic advancement in the long-term. This paper intends to present a short report on the short term effects interest rate changes on the construction industry. The behaviour of any economy can be greatly influenced by the monetary policy. It is observed that decisions about official interest rates by the central banks affect economic activity and inflation through several channels which are collectively known as the Transmission Mechanism of the Monetary Policy. According to the Bank of England Paper on the Transmission mechanisms of monetary policy; Changes in exchange rates have a direct impact on the prices of imported goods and services and an indirect impact on the prices and the competitive ability of the products which compete with the imported products/services. The change in exchange rate is likely to affect the prices of those products in the domestic market which uses imported inputs. Thus through the transmission mechanism of the monetary policy, any changes in the official interest rates affect the savings and investment behaviour of the individuals and firms and also thereby affect domestic demand and supply of production and other manufacturing sectors of the economy. Normally following a monetary contraction in the economy, as a result of the changes in the interest rates, the construction sector reaches the trough of the cycle first, while the manufacturing sector reacts little slowly. However the manufacturing sector reacts very strongly than the construction sector. 3.0 Money Supply and Construction Activity: In general construction activity is very sensitive to credit conditions. According to Goh (1998) the amount of mortgage loans has an influence on the demand for residential construction, since house purchases are financed mainly by mortgage loans from banks. The monetary theorists are of the view that changes in money supply cause fluctuations in national outputs and because of the interdependency the disturbances in one sector will be transmitted to other sectors and markets. A review of the different channels of mechanisms reveals that credit is the primary source of money supply to the construction activity. "A restrictive credit supply leads to decreases in demand for real estate, bonds, stocks, and other assets. Since real-estate prices are sticky, ultimately the supply of credit will affect the construction industry." (Raymond Y.C. TSE and John Rafetry 1999) Similarly a contraction in money supply reduces bank lending to all sectors in the economy including property developers and thereby causes a decline in the industry. Any change in money supply will have its impact on the demand for

Ethical Issues Regarding Informed Consent in the Workplace Essay

Ethical Issues Regarding Informed Consent in the Workplace - Essay Example Different participants at these establishments have different views and beliefs on what is ethical and what is not ethical. An important concept to be derived from the study of ethics is that its applications in the different fields are interrelated and one application can be used to explain the other in a different field (Hardwig, 2010, p.1). Nevertheless, a lesson learned from ethical issues arising in business could be used to solve analogous issues in medicine or any other field. 2. The need for â€Å"informed consents† The controversial issues arising in ethics are due to the diverse human nature and the difference in cultural values. What an individual values most may be of very little value to the other person. In medical ethics, it would be considered that main aim of providing healthcare services is to promote good health and ensure a longer life for the patients. However, there are other factors that affect human desires and that will limit our access to the health s ervices (Hardwig, 2010, p.1). It would be argued that the health providers should make all the attempts to satisfy the needs of the patients by avoiding issues like the cost consideration. This becomes controversial as a point may be reached when the operations at the health center cannot continue due to lack of resources thereby endangering other people’s lives. Besides, it is worth mentioning the fact that a patient went to the hospital to seek medical services does not mean that the medical officer has a full say on what to be carried out, neither does it mean that the patient needs all that the doctor wants to provide or perform (Hardwig, 2010, p.1). Similarly, the view a shareholder would be that his profit in an investment be maximized. However, there will be other factors that influence the desires and that will determine if the profit maximization is the supposed interest. The effects of this profit maximization on the conditions imposed on the employees of an organiz ation will provide an evidence to evaluate such procedures. In most causes, it would turn out to be unjustifiable for an investor to be only interested in the profit maximization (Hardwig, 2010, p.1). These controversial issues call for what is referred to as â€Å"informed consent.† It involves informing the participants to a given decision making activity the probable risks and the conditions associated with the actions to be carried out (Ilgen & Bell, 2001, p.1). It is aimed at ensuring that ethical standards are observed in handling individuals with different interests. It has been found to be applicable in various fields of social sciences that entail research with human participants. The participants in a research need to be informed of the risks involved in participating in the research. However, the American Psychologist Association asserts that there are certain instances when the use of â€Å"informed consents† can be ignored, though it may not be very clear the circumstances under which this may be true. Various legislations have been enacted in the US that protects the rights of the participants in a given research (White, Parascandola & Bero, 2007, p.1). 3. Ethical issues and informed consent in medicine The basic guiding principles that most people value like profit maximization in business or good health and prolonged life in the healthcare