Increase in prices Essay Example | Topics and Well Written Essays - 1000 words

Increase in prices - Essay Example However inflation cannot always be termed as "bad" if seen in terms of higher money incomes. The higher prices of everything would result in higher receipts for resource suppliers and hence a growth in their income levels. Inflation usually results in the standard of living to decline because it now costs more to buy the same amount of goods and services. However there are some cases where the rising prices do not necessarily mean declining living standards. Following are some of the factors: Nominal Income: If the economy is suffering from a period of rising prices and at the same time there is a commensurate rise in the level of income, this would not lead to a decline in living standards. This is because the increase in prices is offset by the proportionate increase in income, resulting in an unchanged consumption pattern. This is assuming everything else is constant. Real income: This is the income that is adjusted for inflation. In cases where the nominal income is rising but the rate at which it is growing is less than the inflation rate, it would not lead to a boost in the standard of living. This is because the inflation will erode the purchasing power of money and people will be spending the extra income in the purchasing of the same amount of goods and services. ... Since almost all countries are plagued by inflation, people look at their real income to determine their purchasing power rather than the nominal income. Tax structure: In an economy where there is a favourable tax structure, the spending patterns are high. This is due to the fact that even though inflation is prevalent, people still have more of the disposable income left over after their regular purchases. The spending patterns have a multiplier effect and in turn lead a general boom in the economy. The excess spending means people are demanding more goods and services signalling to the producers to produce more. Since the level of production needs to be increased, producers would demand more labour and more production would thus lead to an increase in the national income of the country. To sum it up, tax breaks given to the people will not lead to a decline in the standard of living even in the presence of rising prices. Labour: If the economy has more of the skilled labour as compared to the unskilled workforce and the labour productivity is high, this would also result in a higher standard of living. This is attributed to the fact that since the labour is skilled it would demand higher wages for each extra output it produces. Since the employers would want to retain the skilled labour, it would have to pay higher wages otherwise the labour would find jobs elsewhere. The higher wages would cause more spending and this would maintain or boost the standard of living even though the economy might be in the grips of inflation. Interest rate: The level of interest rates in an economy is an important factor in determining the spending patterns of the consumers. If the interest rate is low, then borrowing is

Business to Business Essay Example | Topics and Well Written Essays - 2000 words

Business to Business - Essay Example Amazon.com, the world’s largest online retailer, has developed improved mechanisms for promoting its B2B e-business transactions. This paper will analyze Amazon’s B2B arrangements with other companies and the nature of B2B transactions the company engaged in. In addition to discussing Amazon’s technical architecture that supports its B2B transactions, the paper will also identify the benefits and drawbacks of these transactions. Amazon’s B2B transactions Amazon.com has developed B2B arrangements well with firms across the globe. According to the Forbes writer Kanellos, Amazon is under an ongoing evolution process where the organization is transferring from a consumer retailer to a logistics provider to business houses. Amazon allows third parties (or external marketers) to sell their products by means of its online retail services. Firms can display their inventory information, sell their products, and receive payments online once they created an account i n Amazon.com. In addition, sellers can also make use of Amazon’s Webstore, which would help them take advantages of search engine optimization and backend organization. As Kanellos points out, the volume of products sold by external marketers on Amazon website increased to 36 percent. Amazon follows an interesting B2B model in delivering services to third-party retailers. Traditionally, a store owner or a wholesaler considers the difference between the retail and wholesale price as its profit. In contrast to this conventional business practice, Amazon likes to obtain a commission on its online retail services. Market analysts observe that this business model has greatly assisted the company to advance in B2B marketing. The organization has developed an affiliate program for promoting its products and its online retailers. Businesses can earn income when Amazon products are purchased through clicking those firms’ advertisement link. Publishing is another B2B service off ered by the Amazon. The company launched its self-publishing site in 2011with intent to assist individuals to self-publish their movies, music, and books online and thereby to eliminate intermediary costs. Once an individual obtains a copyright on his products like books or movies, he can use the advertisement and payment solutions provided by the Amazon. The company offers free publishing options and finds its revenues through royalty payments and shopping fees. As Smith opines, the fulfillment program is Amazon’s one of the major advancements in its B2B environment; this program allows organizations to store and ship their products through Amazon’s fulfillment center. Once the Amazon fulfillment center receives the items sent by companies, those items are cataloged into the firm’s system. Under this option, companies can either sell their offerings through Amazon.com or complete the sales process using their own techniques. When items are ordered, Amazon fulfi lls the orders and delivers the products to the end customers directly. Amazon’s back office system assists business houses to track the fulfillment. It is identified that Amazon has B2B relationships with different sizes of businesses ranging from sole traders to corporate giants. As per Amazon’s B2B strategy, new and un-established companies need to commence their operations with personal accounts.