Why is Demand Pull Inflation theory favoured by Freemarket&monetarist economists.
Business and management discussion, revision, exam and homework help.
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Re: Why is Demand Pull Inflation theory favoured by Freemarket&monetarist economists.Demand pull inflation can be influenced by monetary policy through interest rates and the money supply. Cost push inflation is much more difficult to control as it based on wages and commodities.
I have never heard of a theory being favoured by the freemarket and monetarist economists but this may be me, however it would seem strange as one agrees with intervention and the other does not.
If you were asked a question on this I would personally explain demand pull inflation then go on to say how monetary policy would be most effective to achieve the inflation target. This may not achieve full marks but should get you a high mark nevertheless.
Hope this helps!
