Subject: How does arm hair know when to stop growing?

If hair is dead cells, how does it know when to stop growing?  For 
example, the hairs on my arm are about 1cm long.  They've been 1cm long 
for several years.  However, if I shave a few off, they'll grow back to 
about 1cm within the next few months.  How does a hair folicle know how 
long it is, know when it's been cut, and know when to stop growing?

I've also noticed that every so often, one single strand of hair on my arm 
will be 1-2 inches long and be completely out of place.  Does a hair 
folicle sometimes make a mistake and grow too long?  Thanks!

Re: How does arm hair know when to stop growing?