Marshall’s Equation
1. The Marshall equation is expressed as:
2. M = KPY the price level P = M/KY or the value of money = The reciprocal of price level is 1/P = KY/M the value of money (one rupee) = 2,000 units = (KY/M) = two units of goods, or Prices level P = (M/KY) = 1/2 = 0.50 paise per unit.
3. It is, therefore, clear that the value of money (its purchasing power) is found by dividing the total amount of goods, which the community wants to hold out of the total income (KY), by the amount of the supply of the money held by the public (M), and the price level (P) is found out by dividing the money supply (M) by the amount of goods which the community wants to hold (KY), as the price level is the opposite of the value of money.

Keynes and Milton Friedman together suggested three measures to prevent and control of inflation.
(1) Monetary measures,
(2) Fiscal measures (J.M. Keynes) and
(3) Other measures.
1. Monetary Measures:
These measures are adopted by the Central Bank of the country. They are
(i) Increase in Bankrate
(ii) Sale of Government Securities in the Open Market
(iii) Higher Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
(iv) Consumer Credit Control and
(v) Higher margin requirements
(vi) Higher Repo Rate and Reverse Repo Rate.
2. Fiscal Measures:
Fiscal policy is now recognized as an important instrument to tackle an inflationary situation. The major anti-inflationary fiscal measures are the following: Reduction of Government Expenditure and Public Borrowing and Enhancing taxation.
3. Other Measures:
These measures can be divided broadly into short-term and longterm measures.
(i) Short-term measures can be in regard to public distribution of scarce essential commodities through fair price shops (Rationing). In India whenever shortage of basic goods has been felt, the government has resorted to import so that inflation may not get triggered.
(ii) Long-term measures will require accelerating economic growth especially of the wage goods which have a direct bearing on the general price and the cost of living. Some restrictions on present consumption may help in improving saving and investment which may be necessary for accelerating the rate of economic growth in the long run.

BARTER SYSTEM
(i) Exchange of goods for goods was known as “Barter Exchange” or “Barter System”.
(ii) In a barter system, the commodities and services were directly exchanged for other commodities and services.
(iii) Goods like furs, skins, salt, rice, wheat, utensils, weapons, etc. were commonly used as money.
METALLIC MONEY
(i) Under metallic standard, some kind of metal either gold or silver is used to determine the standard value of the money and currency.
(ii) Standard coins made out of the metal are the principal coins used under the metallic standard.
(iii) These standard coins are full bodied or full weighted legal tender.  Their face value is equal to their intrinsic metal value.
GOLD STANDARD
(i) Gold Standard is a system in which the value of the monetary unit or the standard currency is directly linked with gold.
(ii) The monetary unit is defined in terms of a certain weight of gold.
SILVER STANDARD
(i) The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver.
(ii) The silver standard is a monetary arrangement in which a country’s Government allows conversion of its currency into fixed amount of silver.
PAPER CURRENCY
The paper currency standard refers to the monetary system in which the paper currency notes issued by the Treasury or the Central Bank or both circulate as unlimited legal tender.
PLASTIC MONEY
(i) The latest type of money is plastic money.
(ii) Plastic money is a term that is used predominantly in reference to the hard plastic cards used every day in place of actual bank notes.
(iii) Plastic money can come in many different forms such as Cash cards, Credit cards, Debit cards, Pre-paid Cash cards, Store cards, Forex cards and Smart cards.
CRYPTO CURRENCIES
Decentralised crypto currencies such as Bitcoin now provide an outlet for Personal Wealth that is beyond restriction and confiscation.

(i) Currency Inflation:
The excess supply of money in circulation causes rise in price level.
(ii) Credit Inflation
When banks are liberal in lending credit, the money supply increases and thereby rising prices.
(iii) Deficit Induced Inflation:
The deficit budget is generally financed through printing of currency by the Central Bank. As a result, prices rise.
(iv) Profit Induced Inflation:
When the firms aim at higher profit, they fix the price with higher margin. So, prices go up.
(v) Scarcity Induced Inflation:
Scarcity of goods happens either due to fall in production (e.g. farm goods) or due to hoarding and black marketing.
(vi) TaxInducedInflation:
(1) Increase in indirect taxes like excise duty, custom duty and sales tax may lead to rise in price.
(2) This is also called taxflation.