My Perfect Partner in Life - 7009 Words

My Perfect Partner in Married Life Choosing my perfect partner in life takes a lot of prayers and considerations.I dont like to rush or feel desperately alone and marry the wrong kind of person for the wrong reasons --only to regret it later.Nothing should be more important to me and the person I marry than my spiritual well-being.Foremost that I will consider is she should be a believer and a follower of Christ.Shes a worshipper and with a heart after God.I believe that spiritual compatibility is important in marriage. How Can I Know Who To Marry She was young and beautiful, and had grown up in a small town. He was wealthy, an only child, 40 years old, and worked his fathers livestock business. Their homes were separated by more†¦show more content†¦What areas of conflict could develop in a marriage if the two are not believers? What effect could this type of marriage have on the faith of their children as they grow up? [Also See Unequally Yoked] [Return To Headings] prayerpower-Bar Trust God Its not easy to wait for someone else to give you what you desperately long for. Its silly, I know, but I dont enjoy waiting in a long line at a fast-food place where the smell of the hamburgers only makes me hungrier. I dont enjoy financial crunches when bills come in faster than paychecks, and Im left wondering when and if the account balance will ever be in the black again. Our entire lives seem to be a process of learning to wait in dependence on others. It all begins when we are infants--we want our milk, our blankie, our favorite stuffed animal, or a clean diaper. We have to learn again and again that we cant have everything now. We have to wait for Mom and Dad or others to provide what we need. As Christians, we have to learn over and over that we must wait on the Lord, the One who provides all we need. Its not an easy lesson for any of us. We have to discover that His timing is best, that He has everything under control. Thats easier said than done. For a man or woman who has an aching heart and longs to get married, the wait can be very, very hard. What does the story of Isaac and Rebekah tell us about trusting God toShow MoreRelatedPerformance Process : All The Performances924 Words   |  4 PagesPerformances in your class have helped me get my confidence back. I spent almost my entire twenties preforming in front of all types of audiences. Comedy has always been an artistic release for me that I enjoyed. Somewhere down the line in my performance career I lost the passion to perform, it lead to a deep depression, and an involuntary hospitalization. After this, my confidence was completely destroyed not just in my preforming art but also in life in general I had nowhere to go except up. AlthoughRead MoreWhy Don t You Write One?1294 Words   |  6 PagesMy grandfather always told me that I would find the one for me. Jokingly I’d play along and say â€Å"How do I know when I’ve found her?† No matter how many times I’d rephrase the question or throw a spin on it, he would always respond that Iâ⠂¬â„¢d know by the way my potential significant other would make me feel; that our bond would feel more like an everlasting friendship rather than a cruel torment of dealing with a person who does not fit my ideal of a significant other. I playfully ask him one day â€Å"WhyRead MoreEssay on Romance Movies and Real Life Relationships1249 Words   |  5 PagesThese films give the wrong impression of reality when it comes to dating, marriage, having children, and even how to manage a relationship in the first place. Even though romantic movies are commonly watched, there are many effects on personal real-life relationships after watching these types of films. To begin with, romantic movies mold expectations of what love is really like. They portray that love is the only thing that matters. In the past, love was secondary. Relationships were arranged byRead MoreReconciliation780 Words   |  4 Pagesthe same on each sheet. The numbers, which do not fit with a partner, remains unreconciled. The story is written in first-person narrator, where we get the story told by the narrator Laura. The story is chronologically constructed with an open end, which is typically for the short story genre. The narrator is a middle-aged woman, who has not found the meaning of her life yet â€Å"It’s my first day (†¦) and I have forgotten my shoes†, her life is very disorderly and chaotic. Her sense of well-prepared isRead MoreDgrwtrw1526 Words   |  7 PagesYou can forgive and move on with your life to be happy but not forget. In the short story â€Å"Forgiveness† by Rebecca Brown, the protagonist does not forgive her mate for taking advantage of her to an extent where she is completely broken. I personally believe in all circumstances, in order for one to be truly happy in life, it is critical to forgive but never forget.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In the short story â€Å"Forgiveness† the lead character says â€Å"when I said I’d give my right arm for you, I didn’t think youRead MoreThe Love Of Love And Love1732 Words   |  7 Pagesin love gives a feeling of purpose; something to live and strive for. Everyone in this world desires love in any form, whether it is with family, friends, or a romantic partner. It is a basic human need. Basic needs are said to motivate people when they are essentially unmet. When love and affection are missing from a person’s life they feel compelled to create it in their lives. Humans tend to become fixated on the powerful feeling of being in love. While some believe that infatuation has no originRead MoreSex and the City894 Words   |  4 Pagesand the City is a comedy series on HBO based on the lives of four single women in their 30’s, living in New York City, trying to succeed in life and love. The show capture s all the trials and tribulations, in and out of bed, women go through while trying to find the perfect mate. Between the four ladies, they spend most of their time searching for the perfect pair of Jimmy Choo shoes, sipping Cosmopolitan’s at social events and engaging in meaningless conversation with all the wrong men. Sex andRead MoreThe Home For Perfect By Erica Naone973 Words   |  4 Pageswomen are obligated to fill roles in their relationships that will keep them dependent on their partners for as long as they are together. 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He falls in love with a woman by the name of Song, who turns out to be not what he expected.Read MoreSex, Religion, And Gender1073 Words   |  5 Pagessusceptible. To intrigue my curiosity, I asked five different subjects a set of five questions. And all subjects are different ages, gender, and relationship status. The five questions are â€Å"What do you look for in a partner,† â€Å"Do you believe in premarital sex,† â€Å"What is your opinion on cheating,† â€Å"What is your opinion on transgender people,† and â€Å"Do you know what Coitus Interruptus is ?† Many of us have different ideas of the perfect partner. Some people want their partner to be smart, classy, and

Essay on Level of Punishment Does Not Fit the Crime

It is insulting to the victims and families of victims of serious crimes that the justice system fails to make sure that criminals pay the price for the devastation that they cause. For example, Johannes Mehserl only served 2 years in prison for the killing of innocent member of public, Oscar Grant. At the same time, there are examples of 5 years prison sentences for the possession of marijuana. This is enormously unfair, as someone who can take the life of another human being should receive a far harsher punishment than someone whose crime only effects themselves. In today’s society, the level of punishment for crimes are decided and applied by the laws of every country. However, in recent years there has been an increasing sense that†¦show more content†¦How is this possible? How can it be fair that the justice system give a woman who was motivated by love to end her child’s suffering, twice the sentence that was given to a man who set out to harm innocent people? These cases demonstrate the inequality in the justice system that can be caused by judges having too much power to vary the sentences they give to people. If there were clearer guidelines on minimum and maximum sentencing, it would significantly help to address these miscarriages of justice. Although the public want to see criminals punished, the justice system today has been criticised for applying punishments which can seem excessive and sometimes ridiculous. For example, a pub landlord was jailed for six months and fined  £10,000 for allowing people to smoke in his 2 pubs when the smoking ban came in to force in 2008. With the cost of a place in the UK prison totalling to  £119,000, how can this be seen as good value for the tax payer? In addition to these costs, this approach to justice leads to the greater problem of prison over-crowding. A clear example of this problem can be seen when looking at United States of America. One adult American in every ten will go to prison (one in nine for young African American men). America has a prison population of a staggering 2.5 million – nearly half the total population ofShow MoreRelatedRunning Head:. Response Paper 1 Response Paper 3. Advanced1277 Words   |  6 PagesArizona State University Response Paper Crime in the 20th century has become one of the most widely studied areas of research. Today, I am going to briefly outline some of the theories of crime that are used to study the subject. What I will be evaluating these theories against will be small scale property crime such as theft. Classical theory states that crime is committed when there are more benefits to committing the crime than punishments. It also states that crime is a choice and is done with freeRead MoreThe Theory Of Crime And Crime1260 Words   |  6 PagesResponse Paper Crime in the 20th century has become one of the most widely studied areas of research. 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However, there are also times when the punishment does not fit the crime or is excessive. People that commit these crimes do so in hoping that they won’t get caught but when they do they know that they are going to have a punishment that fits the crime. This paper is going to look at the difference between misdemeanors and felonies and the punishment that go with the crimes, and the sentencingRead MoreThe Evolution Of Punishment And Its E ffect On Society949 Words   |  4 PagesIntroduction The evolution of punishment has come a long way in Canada from Confederation in the 1800’s to present day 21st century. Research has been going on continuously to identify whether these punishments are based on a person’s behaviour or on society itself. The word punishment is referred to as a penalty inflicted on an offender through judicial procedure (Punishment | Definition of Punishment by Merriam-Webster). In today’s society does the punishment equivalent to the crime committed by an offenderRead MoreCriminal Law, Questions and Answers 1284 Words   |  5 Pagesin order to combat the high levels of crime. However, there are several areas of criminal law that has received increasing support for restorative justice as opposed to our current system, such as when dealing with youth offenders. Despite the harsh criticism of restorative justice, it has received judicial recognition in a number of cases recently. 2 Punishment Punishment is one of the most important features of the criminal process. Regardless of which punishment theory is being used, one mustRead MoreLiterature Review Retributive Justice: The Case of Justin Wolfe1838 Words   |  7 PagesIntroduction A jury convicted Justin Wolfe of premeditated killing for hire, the use of a firearm in the commission of a felony, and conspiracy to distribute marijuana. The jury further ruled that Wolfe fit the vague standards of future vileness and dangerousness necessary for capital punishment. While Wolfe made multiple admissions during his testimony, he did not admit to conspiracy to commit murder or murder for hire. The presence of two offenders in murder for hire, resulting in shared culpability

Consequences of High Interest Rates in the Ghanaian Economy….. Free Essays

string(40) " face value of 100,000 might be 90,000\." Interest rates are among the closely watched variables in the economy. The media on daily bases record their movement because they affect our everyday lives and have crucial consequences for the health of the economy. They affect personal decisions as whether to consume or save, whether to buy a house and whether to purchase bonds or put funds into a savings account. We will write a custom essay sample on Consequences of High Interest Rates in the Ghanaian Economy†¦.. or any similar topic only for you Order Now Interest rates also affect the economic decisions of households or businesses such as whether to put their money in the bank or invest in new equipments for factories. Before continuing, we must understand exactly what interest rates mean. By holding financial instruments , such as loans or bonds. Savers and financial institutions extend credits to those individuals or firms that issue the instruments. The amount of credit extended is the principal amount of the loan or the bond. Those who hold financial instruments do so because they receive payments from the issuers in the form of interest. The percentage return earned is the interest rate or rate of return. Rate of return is the price of credit in financial markets and is usually expressed as a percentage (%) of the total amount borrowed that is to be paid each year (over and above the repayment of the principal, or amount borrowed). Thus, it is the price of credit of the rate of exchange between the present and the future. Rate of returns (r) vary given interest rate (i). It is the value of i that just equates the present value (PV) of the benefits of the extra capital when discounted at i to its cost (Pk). That is, r is defined as : r=MRP/Pk, where: MRP=Marginal Revenue Product Pk= Cost We would however, take a look at how interest rate is calculated, various theoretical analyses that seek to explain the determination of interest rates, distinctions between nominal and real interest rates. Finally, we shall relate it to the case of the Ghanaian economy and look at the consequences of the high interest rates in Ghana. CONCEPTS OF INTEREST YIELD/RATE Interest yields on financial instruments are thought of in different ways. The most important of these are Nominal Yield Current Yield Yield to Maturity NOMINAL YIELD Assuming that a bond is issued in an amount of 100,000 with an agreement to pay 6000 in interest every year. The annual payment of 6000 is the bond’s annual coupon return. This is simply the fixed amount of interest that the bond yields each year. The nominal yield on a bond is equal to rN= C/F, where rN is the nominal yield, C is the coupon return and F is the face amount of the bond. The annual yield of the 100,000bond with the 6000 coupon yield or return is equal to 6000 / 1000,000=0. 06 or 6 percent. Current Yield The current secondary market price of the bond typically is not the face value of the bond. Bonds often sell in the secondary market at prices that are different from their face value. For this reason, those contemplating on bond purchase often are interested in the current yield of a bond. This equals to r i =C/P Where ri denotes the current market yield, C is the coupon return and P is the current market price of a bond. For instance, the current market price of a bond with a face value of 100,000 might be 90,000. You read "Consequences of High Interest Rates in the Ghanaian Economy†¦.." in category "Papers" If the coupon return on the bond is 6,000 per year, then annual current yield on this bond is equal to 6,000/90,000=0. 667 or 6. 7 percent. Yield on Maturity A bond’s yield on maturity is the rate of return if the bond is held until maturity. Calculating this yield can be complicated, however, because the bonds normally differ. Typically, bonds are sold at a discount, below its face value. Hence, other things being equal, the bond holder receives an automatic capital gain if the bond is held to maturity. A capital gain occurs when the value of a financial asset at the time it is redeemed or sold is higher than its market value when it was purchased. Consequently, the bond pays a coupon return. The yield to maturity must account for both the capital gain and the coupon returns that a bond yields to its owner. MEASURING INTEREST RATES The financial credit market instrument can be classified under four types ?Simple Loan This provides the borrower with an amount of funds (principal) which at the maturity date must be repaid to the lender along with an additional amount known as an interest payment. Supposing, a bank made you a simple loan of 100,000 for one year, you would have to pay the principal of 100,000 in one year’s time along with an additional interest payment of say 10,000 given interest rate to be 10%. Most often, commercial bank loans to businesses are often of this type. ?Fixed payment loan: This provides the borrower with an amount of funds that he is to repay by making the same payment every month, which comprises part of the principal and interest for a given number of years. For example, if you borrowed 100,000, a fixed payment loan might require you to pay 12,600 every year for 25 years. ?Coupon Bond A coupon bond pays the owner of the bond a fixed interest payment every year until the maturity date, when a specified final amount is repaid. For example, a coupon bond with 100,000 face values might pay you a coupon payment of 10,000 per year for 10 years and at the maturity date repays you the face value amount of 100,000. Discount Bond A discount bond is bought at a price below its face value (at a discount) and the face value is repaid at the maturity date. However, unlike the coupon bond, the discount bond makes no interest payment. It just pays off the face value. For example, a discount bond with a face value of 100,000 might be bought for ? 90000 and in a yearà ¢â‚¬â„¢s time the owner would be repaid a face value of 100,000. These four types of instruments require payments at different times. Simple loan and discount bonds make payment only at their maturity dates, while fixed payment loans and coupon bonds have payments periodically until maturity. The decision as to which of the instruments provides you with more income is difficult since they all make payments at different times. To solve this problem, the concept of present value was invented to provide us with a procedure for measuring interest rate on these different types of instruments, Present Value (PV) approach shows the present value Ao of a known amount An, to be received in ‘n’ years assuming compound interest is at the rate ( i) . The present value (PV) formula is Ao=An/(1+i)n NORMINAL VERSUS REAL RATES OF INTEREST So far we have discussed interest rates only in current cedi terms. There is, however, a problem with this. Inflation can erode the value of interest received when a financial instrument matures. Any individual must take this into account when evaluating how much to save. For instance, supposing that a saver can earn a stated current cedi interest rate or nominal interest rate of r=0. 06(6%) on each cedi that he allocates to a one year bond. Supposing also that the saver expects that prices of goods and services would rise by a factor, ? e=0. 03(3%) Where ? e is expected rate of inflation. This is the rate of inflation that he expects to face. Such inflation would reduce the amount of goods and services that his interest would permit him to purchase. Thus, although the saver earns post interest on the bonds he anticipates the inflation will eat away at that interest and the rate ? e. Hence, the real interest rate that this saver anticipated or his expected inflation-adjusted interest rate is approximately equal r = r-? e r = 0. 06-0. 03=0. 03, Where r = real interest and r = nominal interest rate. In terms of what his savings can buy this saver actually anticipates earnings only 3% on his one year bond. A rate of return in current-cedi terms that does not reflect anticipated inflation is known as Nominal Interest Rate. The anticipated rate of return from holding a financial instrument after taking into account the extent to which inflation is expected to reduce to the amount of goods and services that this return could be used to buy is termed as Real Interest Rate. The real interest rate is crucial for determining how much the individual desires to save. The reason is that savings is foregone consumption. This individual is likely to give up more consumption if the real rate of return on savings is large. This means that the real interest rate is a crucial determinant of the saving in the nation where this saver is a citizen. Countries with high nominal interest rates often experience very low saving rates because expected inflation is so high. THEORIES OF INTEREST RATES Various theories have been propounded by various economists to explain the determination of interest rates. However we would focus on three main theories namely; †¢Classical theory †¢Neo-classical/Loanable funds Theory †¢Keynesian/Liquidity Preference Theory CLASSICAL /REAL THEORY OF INTEREST RATES This theory by Marshall and Pigou uses savings and investment in determining interest rates. The theory equates investment to demand for capital or supply of bonds (i. e. , sales of bonds). and savings to supply of Capital or Demand for bonds (i. e. purchases of bonds). Hence interest rate is determined when investment equals savings as illustrated below Figure 1. INVESTMENTS – SAVINGS COMBINATION IN THE BONDS MARKET Where B (supply of bonds) = I( investment ) B (demand for bonds )= S (savings) r is the equilibrium rate of interest at where S=I According to the classicals, there are only two groups of people in the market to provide bonds; investors and government. Firms sell bonds in order to have capital or funds for investments. The sale of bonds however, depends on the expected rate of returns and the cost in selling the bonds. Hence bond price is expressed as PB=Y/r where PB=Bond Price , Y=rate of returns and r= interest rate, implying an inverse relationship between Bond prices and interest rates, Expected rate of returns is assumed fixed, and when interest rate rises above the rate of returns, it affects the relationship between investment and interest rate. Assumptions: †¢The classicals assume that, †¢Income is constant †¢The saving-investment schedules are independent of one another Criticisms: †¢Keynes asserts that income is variable and not constant and that the equality between savings and investment is brought about by changes in income and not by variations in the rate of interest. †¢Keynes also states that the saving-investment schedules are not independent of one another THE NEO-CLASSICAL/LOANABLE FUNDS THEORY This theory explains the determination of interest in terms of demand and supply of loanable funds or credit. The theory defines rate of interest as the price of credit which is determined by the demand and supply for loanable funds. According to Prof. Lerner, it is the price which equates the supply of credit or saving plus the net increase in the amount of money in a period to the demand for credit or investment plus net hoarding in the period Demand for Loanable Funds. Three main entities of demand for loanable funds; governments, business men and consumers need them for purposes of investment, hoarding and consumption. Government borrows funds for constructing public works. Business men borrow for the purchase of capital goods and for investment projects. Such borrowings are interest elastic and depend mostly on the expected rate of profit. Individual consumers however may demand loanable funds for the purchase of durable consumer goods like houses. These borrowings are also interest elastic. At lower rates of interest, people borrow more than at higher rates of interest in order to enjoy their consumption now. Supply of loanable funds The supply of loanable funds comes from savings, dishoardings and bank credit. The main sources of supply of loanable funds are private, individual and corporate savings. Savings depend on the level of income. For a given level of income savings will depend on interest rate, and the higher the interest rate the greater will be the inducement to save and vice versa. This saving is referred to as Personal Savings. Corporate savings are the undistributed profits of firms and it also depends on current rate of interest to some extent. High interest rate deters borrowing and thus encourages savings. Dishoarding may also occur when interest rate is high or increases. Thus, one dishoards (ie, releasing hoarded money or idle money holdings), if the cost of holding that money increases as a result of high interest rate. Hence, there is a positive relationship between interest rate and dishoarding. Banks also give credit when the borrowing rate is high. That is when interest rate on credit payable by borrowers is high, hence a positive relationship between interest rate and bank credit. Criticisms: †¢Savings not interest elastic. The theory over emphasis the influence of the rate of interest on savings as interest elastic. Thus, people save not only to earn rate of interest but also for other purposes like precautionary motive, hence savings are interest inelastic. †¢The theory is also criticized for combining monetary factors with real factors making it unrealistic. †¢Equilibrium rate reflects unstable equilibrium. The demand and supply schedules for loanable funds determine the equilibrium rate of interest OR which does not equate each component on the supply side with the corresponding components on the demand side. KEYNESIAN/ LIQUIDITY PREFERENCE THEORY Keynes defines interest rate as the price which equilibrates the desire to hold wealth in the form of cash that is the demand and supply of money determines interest rates. The supply of money is considered fixed and exogenously determined (that is inelastic). Demand for money is also called liquidity preference which is the desire to hold money. In this case, interest rate is the premium which has to be offered to induce people to hold their wealth in some form other than hoarded money. According to Keynes, speculative demand for money is determined by interest rate and bond prices. He considered the current interest (i) as that which determines the speculative demand for money. The higher the rate of interest, the lower the speculative demand for money. At very low rate of interest people will rather prefer to keep their money in cash than investing in bonds because purchasing of bonds will mean a loss. Determination of interest rates The equilibrium interest rate is determined at a point where the supply and demand for money equilibrates. At the point of liquidity trap, there is the belief that interest rate will not fall but will at a point in time rise hence investors hold money against future rise in interest rate. Criticisms: †¢The theory is considered as indeterminate by Prof. Handson. Keynes asserts the liquidity preference determines the interest rates. The problem is that a new liquidity preference curve would have to be drawn at each level of income. This indicates that income levels will have to be known before otherwise, the supply and demand for money curves cannot tell us what the interest rates will be. †¢Hicks and others were of the view that interest rate is determined by the following; i. Investment demand function ii. Savings function iii. Liquidity preference function iv. Quantity of money function. They are present in Keynes theory but not all are the interest rate analysis. Keynes ignores investment and savings, hence his theory is considered as incomplete. TRENDS IN SAVINGS AND LENDING RATES IN THE GHANAIAN ECONOMY (1994-2004). YEAR19941995199619971998199920002001200220032004 LENDING RATE31. 2440. 5641. 7143. 5838. 536. 54743. 7536. 3632. 7528. 8 DEPOSITE RATE21. 3726. 7532. 2432. 320. 215. 3925. 817. 4312. 4911. 969. 87 INTEREST SPREAD9. 8713. 819. 4711. 2818. 321. 1121. 226. 3223. 8720. 7918. 9 The interest spread was calculated as a difference in the averages of the lending and the deposit rates covering the said period. Between 1997 and 2001, the interest spread increased and subsequently started falling at a slightly varying decreasing rate. This was the period when the lending rates were high 43. 75% in 2001, down from 47% in 2000 because of the high inflation rate and the general turbulence within the economy. The corresponding deposit rate was 17. 43%. Between the years 2001 and 2004, the average interest spread was 23. 66%. This rate of profits of the commercial banks, heralded the spiral influx of foreign banks especially from neighbour Nigeria. It has been taunted that the banking sector is doing very well. In reality there has not been much competition between the existing banks, hence the high lending rate as well as their profits. They tended to act as collusive oligopolies. Recent developments and trends in the banking sector has been that, competition at long last has set in. For instance the Zenith Bank has unilaterally decided to reduce it’s lending rate 14. 1% with respect to the general rate. This will result in much more innovation in the sector resulting in better banking services and a general reduction in the interest rate as pertained in competitive markets. From the existing trends, especially as indicated in the graph above, other sectors of the economy will take advantages of the low interest rate to boost up investments and hence output with a resultant increase in the GDP. This is the miracle of interest rates. HIGH VERSUS LOW INTEREST RATES IN THE GHANAIAN ECONOMY. In most economies including Ghana, interest rates are largely influenced by the prime rate which is the rate at which the central bank gives over-night loans to the commercial banks. Thus, when Bank of Ghana (BOG) fixes its prime rate, interest rates are adjusted depending on the direction of the prime rate. There is however a positive relationship between prime rate and interest rates. When prime rate is set high or low interest rates are also fixed relatively high or low. For instance, interest rates followed a declining pattern in 2003. The monetary policy committee of BOG revised the prime rate downwards from 21. 5% in 2003 to 18. 5% in 2004. In line with this downward revision, the commercial banks’ base rates dropped from an average of 29. 0% to 25. 4%. Interest rates for the 91-day treasury bill dropped from 18. 71% at the beginning of the year to 17. 8% at the close of December 2004. The inter-bank interest rate also dropped from 17. 12% in January to 16. 23% at the end of December. Interest rates, however, low or high have both favourable and adverse effects on the economy of a country. During periods of high interest rates investment falls and savings increase and vice versa in the case of low interest rates. The table and graph below shows interest rates, 1998-2004 and interest rate margins respectively. YEAR1998199920002001200220032004 SAVINGS22262929. 2525. 232319. 25 TIME DEPOSITS914. 7513. 520. 520. 1418. 515. 5 Holders of stocks lose during periods of high interest rates and holders of money (cash) gain though money earns zero interest. In periods of economic boom, high interest rates might be needed to check inflation, while low interest rates will be needed to stimulate investments and create employment in recessions. In between these two extremes, interest rates are adjusted up or down depending on prevailing economic conditions. High interest rates will slow down the economy and cripple the private sector. Investors cannot access funds from financial institutions, thus creating low level of investments. It will also be tempting to invest available funds in high yielding bonds than in infrastructural business investments. This will reduce spending, shrink national output and bring down inflation. Low level of investments will therefore create unemployment. The central bank reacts by lowering interest rates using the sight deposit rate (inter-bank transaction rate with commercial banks also referred to as the key rate). Low interest rates stimulate the economy. Investors can access low-cost capital for investment. Employment increases, and the national output increases. Low interest rates therefore allow for borrowing and spending, but then, inflation will also pick up. As inflation picks up, companies can increase employment, since real wages decrease. Successive increase in interest rate leads to inflation. Inflation however bad for an economy also leads to reducing unemployment rates since there is a negative relationship between inflation rate and unemployment rate. CONSEQUENCES OF HIGH INTEREST RATES IN THE GHANAIAN ECONOMY. High interest rates have certain repercussions in the Ghanaian economy. Prior to 1987, there was a decline in economic growth and development in Ghana due to high interest rates. Current high interest rates on bank loans (over 25%) and treasury bills (17%) have been a serious impediment to raising capital in the local market. private sector growth in Ghana has been constrained by limited financing opportunity for private investments. High interest rates lead to crowding out of the private sector in the money market; it makes available loanable funds to the government. Thus, lenders of loanable funds shift lending to only the government with the surety that there is 100% safety in retrieving their money since they believe that governments do not die. Studies done in the past show that the growth process in Ghana has been driven mostly by public investments. As a result, some have attributed the lack of accelerated growth to a combination of weak investment and low productivity from the private sector. Hence the current government in its manifesto promised to make the private sector the engine of growth by providing the right socio-economic framework. For example, the government through the monetary policy committee of the bank of Ghana (BOG) managed to reduce the Bank’s Prime Rate from 21. % in 2003 to 18. 5% in 2004 and currently down from 15. 5% at the beginning of 2006 to 14. 5%. When the prime rate fell, the BOG was expecting a corresponding decrease in commercial bank lending rates but its evident that the private sector is not responding to such developments; commercial bank lending rates have ranged between 18. 5% and 33. 5% as indicated by the Governor of the BOG. This has been a major concern for small and medium scale enterprises that cannot access loans at these exorbitant rates to expand their activities High interest rate may lead to increase in debt ratio that is, when interest rate is set high, cost of governments borrowing increases, interest payments increases and total debt increases. When government wants to finance its debt, it either prints out or borrows money to finance its debt. However if the government wants to avoid the former which usually leads to inflation, it falls on borrowing to finance its debt. These borrowings also attract interest payment which increases the total debt payment in economy. For instance, profile of interest rates in Ghana reveals the real rates ranging from 10% to 21. 7% in 1996 to 1999. The high rates which are more than 100% between 1996 and 1999 worsen the debt burden. It is clear that since1997, borrowing from domestic sources was not even enough to finance the deficit as a result of high interest payments, thus for the last half of the 1990’sthe country had to borrow externally and/or print money to finance the deficit. For instance, in 1995 change in domestic debt was 200. 9 billion cedis but interest payment was 232. billion cedis which is over and above the change in domestic debt. As in year 2000 change in domestic debt was just 855. 5 billion cedis but interest payment was1446. 2 billion cedis over and above the change in debt. Consequently, as a result of the borrowing (i. e. domestic and external) it contributed to a high rate of growth of our debt that led to a state of bankruptcy in which the government failed to honour its debt obl igation. As a result, in 2001 the Ghanaian economy was declared H. I. P. C. ?The need for the government to make interest payments on large debt may contribute to inflation. For example ,inflation may result if the government decides to finance interest payment, not by collecting taxes, instead by borrowing. For instance, prior to year 2000, the government of Ghana depended on borrowing to finance its debt as a result inflation recorded at that period was very high ( i. e. 41%). ?At very high rate of interest people hold bonds or save money rather than investing. Inflation occurs as a result of higher prices of goods and services, cost of living become very high, the poor and low income earners suffer economic hardships. Between 1980 and 1983 in Ghana, inflation was very high not forgetting interest rate as well. This led to economic hardships in 1983. ?High interest rate deprives both local and foreign investors from investing in the economy. This disturbs economic growth and development. In Ghana, when interest rates are high foreign investors invest in capital goods rather than in productive ventures. In spite of the consequences of high interest rate, there are also some benefits. The truism that high interest rate contributes to high inflation rate reduces unemployment ratio in the economy. In Ghana for instance, the economy has achieved respectable rate of GDP growth averaging over 4% in the 1990s as compared to the negative average growth rate over the period 1970 -1983. However, the average inflation rate fell to about 19% in 1998 relative to 122% in 1983 due to increase in employment levels or a reduction in unemployment levels as one of the factors responsible for this trend. ?High interest rate serves as a tool for monetary control in the economy. Through the use of the open market operation (OMO), where the economy is operating beyond its full employment level. That is when it is considered as being hot; the rate of interest can be increased by the central bank in the purchases of previously issued governments bonds. This mops up excess liquidity thereby reducing the money supply in the economy. The result is that demand for money now exceeds money supply thereby bidding up interest rate. This slows down the growth rate to an acceptable level enabling the economy to operate at full employment level. ?During periods of high interest rate, financial institutions records very high turn-overs. Governments tend to earn high tax revenue through taxes charged on banks’ turnovers. The bank of Ghana’s annual report (1997), recorded a high turn-over as a result of high interest rates as shown in the table below . The Central Bank maintained its rediscount rate at 45. 00per cent throughout the year under review. Money market rates were also fairly stable in the year. The 91-day Treasury Bill discount rate for example remained at 42. 80 per cent through November before declining to 42. 48 per cent at the end of the year. The commercial banks’ borrowing rates were also generally stable throughout the year. Rates for savings deposits moved up slightly from 22. 50-31. 0% to 22. 50-32. 00% and the range for call money from 25. 00-31. 00% to 24. 00-34. 00% per annum. The bank’s lending rates however, showed some upward trends. Rates for the Agricultural sector (usually the lowest) moved up from 30. 00 –47. 00% to 35. 00 – 49. 00% per annum while that for the miscellaneous (usually the highest) rose from 41. 50 – 48. 00% per cen t to 41. 50 – 51. 00% per annum. INTEREST RATES (Percent Per Annum) 1994199519961997 DecemberDecemberDecemberDecember 1. CENTRAL BANK a. Rediscount Rate (Bank Rate)33. 0045. 0045. 0045. 00 b. Treasury Bill Discount Rate(91days)29. 040. 5042. 8042. 48 2. DEPOSIT MONEY BANKS A. Borrowing Rates. (%) i. Demand deposits4. 00-13. 445. 00-10. 005. 00-10. 005. 00-15. 00 ii. Savings Deposits13. 75-22. 5021. 50-31. 0022. 50-31. 5022. 50-32. 00 iii. Time Deposits 1 month22. 00-26. 5026. 00-32. 5029. 00-37. 0029. 00-37. 00 3 months14. 50-31. 0025. 00-36. 0025. 00-40. 5025. 00-39. 00 6 months14. 75-31. 0022. 75-37. 0032. 00-39. 2532. 00-39. 50 12 months14. 00-31. 0023. 50-36. 0027. 75-39. 5027. 75-39. 75 24 months22. 00-29. 2524. 00-35. 0027. 50-35. 0024. 00-35. 00 36 months26. 50-29. 0035. 0035. 0030. 00-38. 00 iv. Certificate of Deposits13. 75-24. 5023. 50-37. 0025. 00-37. 0025. 00-37. 00 v. Call Money25. 00-33. 5024. 00-34. 00 vi. Any other20. 00-24. 0022. 50-25. 0022. 50-33. 0022. 50-33. 00 B. Lending Rates. (%) i. Agriculture, Forestry Fishing22. 50-35. 5028. 00-47. 0030. 00-47. 0035. 00-49. 00 ii. Export Trade20. 38-35. 5034. 25-47. 0030. 00-47. 0035. 00-49. 00 iii. Manufacturing26. 00-35. 5033. 00-47. 0039. 00-47. 0039. 00-49. 00 iv. Mining Quarrying29. 00-37. 5030. 00-47. 5035. 00-47. 5035. 00-49. 00 v. Construction29. 00-37. 5039. 00-47. 5041. 00-47. 5041. 50-49. 00 vi. Other Sector29. 00-37. 039. 00-47. 5041. 50-48. 0041. 50-51. 00 Source: Bank of Ghana During the year under review, total outstanding credit granted by commercial banks to public institutions and the private sector increased by ? 474. 8 billion or 64. 8 per cent to ? 1,207. 2 billion. This compares with an increase of ? 299. 8 billion or 69. 3 per cent in the previous year. The Commerce and Finance sector recorded the highest increase of ? 84. 5 billion followed by Cocoa Marketing sector which registered an increase of ? 78. 2 billion. Significant increases were also recorded in outstanding credit to Manufacturing (? 1. 5 Billion), Construction (? 53. 2 billion), Services (? 49. 7 billion), Mining and Quarrying (? 36. 7 billion) and Import Trade (? 18. 8 billion). Credit for Cocoa financing showed an unusually large increase as a result of financial accommodation given to COCOBOD in the face of a larger than expected crop size. In conclusion, the various levels of interest rate (that is high or low) affect the economy in diverse ways (i. e. positively and negatively). However the optimum benefits derived from those varying levels of interest rates depends on prudent economic management. The interest rate problem does not rest with Government and the Bank of Ghana only but also the commercial banks. The rising rates of interest are acts perpetuated by the banks for more profit and these rates charged by the commercial banks are just too high and that is what hurt investors. In addition, the banks impose charges and commissions which are completely inexplicable. REFERENCES: ?Business and Financial times issue number 689 ?Bank of Ghana Annual report (1997) ?The state of the Ghanaian economy (2004) ?The internet (Nii K. Sowa, CEPA, Inflation and interest rate fixation in Ghana) ? Article by Ampong Owusu Kwabena -Bsc engineering KNUST, Masters in international business (NORWAY), and Masters in Financial Economics (NORWAY). ?Managing Ghana’s Dept. – Nii K. Sowa, CEPA, Accra ?Henderson and Poole; Principles of Economics ?David C. Colander: Economics ?Miller, R. L and D. D. Van Hoose; Money, Banking and Financial Market ? Miskkin F. S: The Economics of Money and Banking and Financial Markets ? Dr. Henry D. Jackson: An Introduction to Macroeconomics 1999 ? Dr. Henry D. Jackson- McConnell Brue: Economics, 5th Edition. How to cite Consequences of High Interest Rates in the Ghanaian Economy†¦.., Papers

My Responsibility to America Essay Example For Students

My Responsibility to America Essay Outline1 Introduction2 Being Informed as an American Citizen3 Law Dictated Responsibilities4 Being Proud of My Country5 Conclusion Introduction Every person in America  has a responsibility  to be loyal to the country and respect the law laid down by the government. The term responsibility  refers to the state of being in charge, answerable, and accountable for something within your management or control. When it comes to pondering about my responsibility to America, what comes to my mind is being faithful by being informed, voting and paying taxes. In addition, it is my responsibility to acknowledge and honor the individuals who defend the freedom of our country  on a daily basis. Unfortunately, a large percentage claims to take pride in being Americans, but on the contrary, they dont take responsibility  in defending our countrys  foundational values and beliefs. They also dont honor the people who have dedicated their lives in defending our rights and keeping these foundational beliefs. On top of paying taxes, voting and being informed, it is essential to note that everyone has ethical and moral obligations which we should all fight for continuously. The people in our country  refer each other as Americans, but the so-called unity is farfetched. My responsibility to this great nation  is to observe all my duties  and to be responsible for safeguarding its ideals. Being Informed as an American Citizen Although it might seem like a necessity, being informed is a fundamental duty every other person in  America  is accountable for. Each one of us should be informed about all the current happenings taking place in our nation, and act accordingly. Every other citizen should be held accountable for  understanding all affairs in our country. Once you are informed, you are in a position to elect officials who are in line with our values and who will uphold American beliefs. It is possible to make a difference once you are informed about the dynamics of our country. Law Dictated Responsibilities As required by the law, my responsibility to America  is to be accountable for  legislative laws and policies. As a citizen of America, there are certain responsibilities  that I am required to fulfill including attending school up to a particular level, paying taxes, being a law abiding citizens, etc. fulfilling duties  is a responsibility  for all citizens in American. In this case, duties may be compared to completing school homework while responsibilities  are the house chores. Although it may not be a must for you to do house chores, it is ethical to work on them. On the contrary, homework  is crucial in acquiring decent grades. Failure to take your homework serious will lead to lower grades which will affect your future academic endeavors. Just the same way with chores and homework,  once Americans dont fulfill their duties  and responsibilities, there will be some consequences. Both aspects are essential for the general functionality of our country. Being Proud of My Country Now that I have grown up, I fully understand at greater depths what being a citizen in America entails. It appears like a foreign perception for individuals not taking pride in their country of origin. I recognize that not everyone who now lives in  America  was born here, but many have decided to live in this great nation. Thus, everyone who lives here should take pride  in that. For sure, not everyone believes in fighting for our country  because they believe that believing in it does not solve anything. One thing they dont understand is the sacrifice some country heroes made for us to enjoy the kind of freedom we are experiencing today. Undeniably, our country  may be having some issues particularly with politicians having different opinions on particular topics but in spite of everything, remember that we enjoy much liberty more than any other country. We have the ability to assist the struggling countries. We are always the first country to offer assistance in the form of finances and moral support once a natural disaster arises. Even though we not in an agreement with all that is happening in this country, at least we need to respect it. .u8b612d0d1e21dcf2540ad5aa5eaad98a , .u8b612d0d1e21dcf2540ad5aa5eaad98a .postImageUrl , .u8b612d0d1e21dcf2540ad5aa5eaad98a .centered-text-area { min-height: 80px; position: relative; } .u8b612d0d1e21dcf2540ad5aa5eaad98a , .u8b612d0d1e21dcf2540ad5aa5eaad98a:hover , .u8b612d0d1e21dcf2540ad5aa5eaad98a:visited , .u8b612d0d1e21dcf2540ad5aa5eaad98a:active { border:0!important; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .clearfix:after { content: ""; display: table; clear: both; } .u8b612d0d1e21dcf2540ad5aa5eaad98a { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u8b612d0d1e21dcf2540ad5aa5eaad98a:active , .u8b612d0d1e21dcf2540ad5aa5eaad98a:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .centered-text-area { width: 100%; position: relative ; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u8b612d0d1e21dcf2540ad5aa5eaad98a:hover .ctaButton { background-color: #34495E!important; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u8b612d0d1e21dcf2540ad5aa5eaad98a .u8b612d0d1e21dcf2540ad5aa5eaad98a-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u8b612d0d1e21dcf2540ad5aa5eaad98a:after { content: ""; display: block; clear: both; } READ: Trifles and symbols EssayConclusion I have come to learn that, fulfilling my responsibility to America  is not only what is considered to be an American, but I am also required to take pride in being a part of this nation mainly because of some reasons such as having the rights that many nations dont have. We need to honor the heroes who fault tirelessly for the rights of our country  since they are the main pillars by which the democracy of America is built on. Honestly, there are some responsibilities that we dont enjoy doing, but we are accountable for  them regardless such as paying taxes; but once we consider the dire state by which our country  could be with no such measures, you are prompted to have a change in your perspective and fulfill these responsibilities.