Monetary and Fiscal Policy in the Euro Area Essay

Monetary and Fiscal Policy in the Euro Area - Essay Example At its beginning stage, in 1990 the EU has made the free capital movement within the euro area and formation of a single market certain. In the second stage the EU introduced the formation of the European Monetary Institute (EMI) in the period of 1994-1999, which is the pioneer of the European Central Bank (ECB). The third and final stage has been traced by introducing the euro currency along with a single and common monetary policy of the European Central Bank in the euro area. It is noted that though each of the member of the EU are also the elements of the EMU, however, the euro area does not consist of all the EU countries. Only the members who have considered the euro as their currency have been incorporated in the euro area. Only these countries are liable towards the ECB’s monetary policy. Except the UK and Denmark, all the member countries of EU have been entailed to become a part of the euro area by meeting the criteria regarding the specific economic convergence stan dards. The policies regarding the economic surveillances under the framework of the EMU demand that all members should guarantee the harmonization of their economic policies. Beside they are required to grant their mutual supervision of the union and reveal the regulations related with their financial as well as budgetary policies. With the provision of monetary policy, the stability of the single currency, the euro, is supported and emphasized. However, considering the strategy requirements towards the arrangements of pensions, labor or capital market, the fiscal policy, the policies of taxes and expenditures, remains under the control of the individual state governments of the member countries. But for functioning of the EMU directions effectively in accordance with its requisite, a supportive public finance is necessary along with supple and assimilated labor, product, and financial markets. Governments of all the member countries are required to sustain their

Irrational Consumer Behavior. Why consumer often makes irrational Essay

Irrational Consumer Behavior. Why consumer often makes irrational decision to buy a low quality product because of advertisement or cultures - Essay Example Often a big poster of advertisement or television leads people to make some irrational decision in buying products. The role of television advertisement is significant in irrational consumer behavior (Mafe & Blas, 2007). Consumers often buy a low quality product because they were â€Å"deceived† by the advertisement. This happens because a majority number of individuals just trust tons of beautiful fonts, and words on the advertisement without making any further research about the products. The importance of the sensory receptors (eyes, ears, nose, mouth, and skin) plus peer pressure play an important role in irrational buying. Thus, the marketers often create great teasers to play with the consumer emotion because they know that the coherent pictures and the dynamic graphic on the commercial video are enormous stimuli for getting the consumer attention. Advertisement makes a lot of people ignore the details that are more important than the words that are written on the advert isement. If individuals do more research before they buy the products, they will make the rational choice. However, only a few people are eager to look up additional information on the internet when they are already falling in love with the advertisement on the Television, and Posters. Furthermore peer pressure is also involved in influencing people’s mind when deciding the products that they want to purchase. All of this influential advertisements, that are created by marketers often lead people in choosing some of the bad choices. The marketer has a great way to advertise their product in society with the right timing, and at the right moment. Therefore, people’s perception of being interested at some commercial often lead many people to forget about the health issue because of their subliminal perception. This forces the consumers to purchase more expensive products of low quality because of advertisement Stimulus of the big brand products, and get a poor service by paying a great amount of money after just looking at the descriptive terms of the advertisement. Health is one of the crucial issues in this world. Individuals need health in order to do their jobs. However, there are a lot of health issues in today’s world. But why people often make an irrational decision by buying these unhealthy products with higher price instead of cheaper healthier foods? It is because people frequently consume unhealthy foods. For example, they are willing to spend $1 more for Soda like Coca Cola, and Sprite. This is because of they are attracted by the beautiful soda commercial. Many of soda firms contract a great marketers in their division to market the products. So today, a lot of Soda Corporations are focused on the subliminal perception of people. â€Å"Stimuli that are too weak or to brief to be consciously seen or heard may nevertheless be strong enough† (Schifmann & Kanuk, 2009, Pg. 160). It is about the stimulated awareness of people t hat responds to the advertisement they have watched. By understanding this fact, the marketers use the subliminal commands like DRINK SPRITE, and filming a commercial that tells the audiences that COKE is the best beverage to relieve the feeling of thirst. These types of advertisement have a high effectiveness in becoming a great attention grabber. A big number of people make an irrational decision by buying these drinks as their daily beverages when they can buy cheaper bottle of water that is healthier. Even though Soda brings many health issues like Diabetes, and Obesity, they don’t care about that because they prefer to satisfy their needs after watching the interesting advertisement. Mostly these ads are aired on television, and television advertisement plays a great role in purchase decisions