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Christmas '02: The Relationship between Demand and Supply As the year draws to an end, a familiar and relentless barrage of 'sweet deals' are aired on television, magazines, newspapers, billboards, subways and the more interactive media, the Internet. "Zero down payment", "Interest Free Financing", "Fifty percent off", "Unbelievable Sale" and "No payments till 2004" are the slogans that the advertising media belts out. What are the factors that are encouraging suppliers to sacrifice high margins, cut into profits and even sell products at a loss? Consumers aren't buying. And in order to motivate demand, lucrative incentives must be provided. So why aren't consumers demanding products and services? The reason can be attributed to the fact that the current economy is hurling towards an economic depression. Why do people have less money have to spend? The answer lies in the purchasing power of the dollar. Over the years the purchasing power...

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