<P> The Cambridge equation formally represents the Cambridge cash - balance theory , an alternative approach to the classical quantity theory of money . Both quantity theories , Cambridge and classical , attempt to express a relationship among the amount of goods produced , the price level , amounts of money , and how money moves . The Cambridge equation focuses on money demand instead of money supply . The theories also differ in explaining the movement of money : In the classical version , associated with Irving Fisher , money moves at a fixed rate and serves only as a medium of exchange while in the Cambridge approach money acts as a store of value and its movement depends on the desirability of holding cash . </P>
<P> The Cambridge equation formally represents the Cambridge cash - balance theory , an alternative approach to the classical quantity theory of money . Both quantity theories , Cambridge and classical , attempt to express a relationship among the amount of goods produced , the price level , amounts of money , and how money moves . The Cambridge equation focuses on money demand instead of money supply . The theories also differ in explaining the movement of money : In the classical version , associated with Irving Fisher , money moves at a fixed rate and serves only as a medium of exchange while in the Cambridge approach money acts as a store of value and its movement depends on the desirability of holding cash . </P>
explain cambridge version of the quantity theory of money
explain cambridge version of the quantity theory of money
attempt to express a relationship among the amount of goods produced , the price level , amounts of money , and how money moves
attempt to express a relationship among the amount of goods produced , the price level , amounts of money , and how money moves