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In purely theoretical plan it is impossible to deny that this reaction can

To lead to the necessary decrease in norm of percent on money. Is available, however,

Variety of the reasons in aggregate insuperable, why in economy Type habitual for us the probability of that norm of percent is very high on Money in many cases will resist to decrease in the necessary sizes.

First of all we should consider effects which renders Falling of unit of wages on limiting efficiency of other assets In money terms, as us the difference interests just between

The assumption that it in arises falling of unit of wages Further again will increase, the result will be quite favorable. If

On the contrary, expectation of the further falling, indicated will be a consequence

Effect on a marginal efficiency of the capital can stop falling Norms of percent (105).

That fact that wages in the monetary form tends to be Inactive, and the nominal wages are more stable, than The real wages, limit ability of unit of wages (In transfer on money) to fall. Moreover, if it was not so, Position would appear not better, and is even worse. As if the wage The payment could be lowered easily it often would generate expectation The further falling with adverse consequences for the limiting Efficiency of capital. Furthermore, if wages it was necessary To establish in any other goods, for example in wheat, It is improbable, that it continued to remain inactive. In force Special characteristics of money, in particular what do their liquid,


Thirdly, we approach to the most important reason in the given Reasoning, namely to those properties of money which satisfy Liquidity preference. In the certain, often arising circumstances These properties do norm of percent, especially if it more low The certain level (107), tolerant even to the significant

To increase in quantity of money in relation to other forms of riches. Others

Words, after some point the income of the money, arising owing to them

Liquidities, does not fall in reply to growth of their quantity in such degree, in

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