Answer to Question #99922 in Macroeconomics for fatima

Question

EXplain the role of money according to cambridge approch ?explain the relationship between quantity of money , price level,and level of output

Answer 1

The role of money according to Cambridge Approach explains that the utility is gained while holding money as an unit of exchange and store of wealth. Holding money is dependent upon the desirability of the individuals to keep cash.

The Quantity theory of money focused on the demand for money in the economy which is the amount of cash held by the people, corporations and the government for their daily needs. The equation is

M = kPY