Market Demand and Fiscal Policy; Demand on Goods and Services

Introduction
"Inflationary pressures have been present in our economic system for many years, and in fact in the economic systems of most of the world" (Mueller, 1998, p.246). "Most people think that inflation erodes the average purchasing power of income in the economy" (Hall and Lieberman, 2001, p.496). The consumer's response towards the pressures of inflation is inclined to vary depending on the fluctuation of the business cycle.
The major source of demand for goods and services produced are consumers. …