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Thus, we at first should consider effect of changes in Quantity of money for size of effective demand. Generally speaking, increase Effective demand it will be partially expended on degree increase Uses of resources and partially on price level increase. Thus,Instead of stable prices in the presence of not used resources and the prices growing
To proportionally quantity of money in the conditions of complete use of resources,
We practically have the prices gradually growing in process of increase of employment
Factors. Therefore the Theory of the Prices, i.e. The relation analysis between changes in
Quantity of money and changes in a price level for the purpose of elasticity definition
The prices in reply to changes in quantity of money, should address to five To the complicating factors transferred above.
We will consider each of them one after another. But such method of an exposition not
Should generate submissions as if these factors, strictly speaking, are independent
From each other. For example, in what proportion increase in the effective
Demand it is divided in the action between increase in a volume of output and
Rise in prices, can affect and character of communication between quantity of money and
In size of effective demand. In the same way and distinction in proportions, in
Which compensation of various factors varies, can influence on
The relation between quantity of money and size of effective demand. The purpose
Our analysis at all in creating such mechanics or such
The sample scheme of operations which automatically would issue the faultless
The answer, and in supplying itself with a method for regular and Systematic studying of some problems. Therefore after an establishment Preliminary conclusions by consecutive isolation of one other Complicating factors we should return now to our initial position and
To consider, how much it is possible, probable interactions of all these factors.
Such is the nature of economic thinking. Any other method Applications of formal principles of knowledge (without which, however, we Would lose the way, as in wood) would lead us to errors. A serious defect Formalisations of economic analysis by means of the pseudo-mathematical Symbolics, like that that is presented in VI present head, in that and
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