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The moment) to grow more fast, than the prices. Therefore there is a question that happens,If on reaching this item costs still continue to grow.
Up to this item decrease of the income because of connection it Quantities of work with the given volume of a fixed capital to compensate The consent of wage labour to reduction of real wages. But beginning
From this point on for attraction of a unit of labour to work it would be required
Equivalent it quantities of production, while production exit in Result of application of each subsequent unit of labour would become all It is less. Therefore conditions of strict balance require, that wages
And the prices and consequently, and profit would increase all together in the same
Proportions, as costs, i.e. That "real" significance of all sizes, Including a volume of output and employment, remains invariable in all Relations. We have got, so to say, to a situation, for which primitive The quantitative monetary theory appears quite satisfactory (if To interpret "velocity of money" as "velocity of money on
To the relation to incomes ") for the volume of output here does not vary, and the prices
Grow in an exact proportion to MV.
Nevertheless significance of this conclusion is limited to a number of the practical
Clauses which should be remembered at attempt to apply it to the real Lives.
1. For known time at least the rise in prices can enter Businessmen in error and to induce them to increase in employment over That level, at which their individual profits measured in units Production, become maximum. After all businessmen have so got used To see in growth of the monetary receipt of the goods a signal to expansion Productions that they can continue to act thus even then,
When it practically already ceases to be for them favourable. Differently, in
Conditions of a new price level they can give to use incremental costs The underestimated estimation.
2. In view of that that part of profit which the businessman is compelled
To give the investor, it is fixed in the monetary form, a rise in price, at all
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