<P> Monetarists believe the most significant factor influencing inflation or deflation is how fast the money supply grows or shrinks . They consider fiscal policy, or government spending and taxation, as ineffective in controlling inflation . The monetarist economist Milton Friedman famously stated, "Inflation is always and everywhere a monetary phenomenon ." </P> <P> Monetarists assert that the empirical study of monetary history shows that inflation has always been a monetary phenomenon . The quantity theory of money, simply stated, says that any change in the amount of money in a system will change the price level . This theory begins with the equation of exchange: </P> <Dl> <Dd> M V = P Q (\ displaystyle MV = PQ) </Dd> </Dl> <Dd> M V = P Q (\ displaystyle MV = PQ) </Dd>

Giving an example explain the measure of value function of money