रोख शिल्लक दृष्टीकोनाच्या मार्शलच्या समीकरणामध्ये, M=KPY 'K' हे अक्षर दर्शविते.

The correct answer is Option C (Fraction of real income which people desire to hold in money).

Key Points:
• Cambridge Cash Balance Approach: The Cambridge approach to the quantity theory of money was developed by economists at Cambridge University, including Alfred Marshall, A.C. Pigou, and John Maynard Keynes.
• Marshall's Equation (M = KPY): In this fundamental equation, M represents the total money supply in the economy. P is the general price level, and Y is the real national income. Therefore, PY represents the total nominal national income.
• The Role of 'K': The letter K is the central component of this specific approach. It stands for the fraction of real income (or wealth) that people desire to hold in the form of liquid cash rather than investing or spending it.
• Contrast with Fisher's Equation (MV = PT): While American economist Irving Fisher focused on the velocity of circulation (V) (how fast money changes hands), the Cambridge economists focused on K, highlighting the store of wealth function of money. Mathematically, K is essentially the reciprocal of the velocity of money (K = 1/V).
• Other Options Analyzed: Option 1 (Supply of money) is clearly denoted by M. Option 2 (Velocity of circulation) is denoted by V in the transaction approach. Option 4 (Price level) is denoted by P. Hence, K strictly represents the cash balance preference of the public.
• Key Takeaway: In M=KPY, K is the fraction of income held as cash; it represents the Cambridge Cash Balance Approach.