Page 124 - Microsoft Word - 00 ACCA F1 Notes Prelims.docx
P. 124
Chapter 7
Monetarist view (supply side)
Monetarists returned to the classical The only reason that the economy
view that there was only one does not find its equilibrium is because
equilibrium point in the economy. it will be hindered by market
imperfections.
The role of government is therefore to Market imperfections tend to include:
remove imperfections allowing the inflation, government spending and
economy to naturally find its ideal inflation, price fixing, minimum wage
equilibrium. legislation, regulation of markets,
abuses of monopoly power.
118
