RBI

Finance Ministry

President

Planning Commission

high price level

large money supply

high production

high interest rate

under-er-employment

inflation

non-monetised consumption

low saving

investment

production

sales proceeds

incomes

People can undertake exchange without using money

The only function of money is to be a medium of exchange

One problem with coins that included valuable metals was that rulers might replace them with debased coins and so cause inflation

From 1719-1931 it was generally possible to exchange Bank of England notes for gold at a stable rate