Chapter 6 complete

 Serial 
Number 
Fisher’s Transaction Approach to 
QTM 
Cambridge-Cash balance Approach 
to QTM 
1. 
Fisher’s transaction is associated with 
Irving Fisher.
Cambridge-Cash balance approach is 
associated with Cambridge economists 
like Marshall, Pigou, Robertson, J. M. 
Keynes, and Cannan.
2. 
Fisher’s transaction to QTM is based 
on medium exchange function of 
money. 
Cambridge-Cash balance approach is 
based on store value function of money.
3. 
Fisher’s transaction to QTM focuses on 
supply side. 
Cambridge-Cash balance approach to 
QTM focuses on demand side. 
4. 
Fisher’s quantity equation or exchange 
of equation is MV = PQ 
Cambridge-Cash balance version of 
quantity equation is M = kPY

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5. 
Fisher’s quantity equation is also called 
cash transaction equation. 
This approach is also called cash 
balance approach. 
6. 
The human element has not been 
accorded its due place in the Fisher’s 
equation of exchange. 
The human element has been accorded 
its due place in the Fisher’s equation of 
exchange. 
7. 
In Fisher’s equation velocity of 
circulation of money and credit is 
represented by V and V.’ 
In Cambridge-Cash balance V is 
reciprocal of 1/K. 
8. 
Fisher’s quantity equation emphasises 
the transaction velocity of money, V. 
Cambridge-Cash balance emphasises on 
the demand for cash balance of income, 
kPY. 
9. 
Fisher’ equation considers supply of 
money over a period of time so that 
money is flow concept.
In Cambridge-Cash balance, supply of 
money is considered at a point of time 
so that money is stock concept.
10. 
Price level in the Fisher’s equation 
represents prices of all goods. 
Price level in the Cambridge-Cash 
balance represents prices of only 
consumption goods. 
11. 
Fisher’s equation considers value of 
money over a period time.
Cambridge-Cash 
balance 
considers 
value of money at a point of time. 
12. 
It got popularity in the U.S.A. 
It got popularity in Britain.
13. 
Transaction approach was advocated by 
classical economists. 
Cambridge-Cash balance approach was 
advocated by Cambridge economists.