Question

Difference between fisher and cambridge quantity theory of money

Answer 1

8. Nature of Variables: Various variables in the Cambridge equation are defined in a better and more realistic manner than those in the Fisherian equation. T in Fisher's version refers to the total transactions, whereas in the Cambridge equation, T refers to only the final goods and services.

Answer 2

Answer:

• 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.