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The schedule of a marginal efficiency of the capital and norm of percent remainThe invariable. If in the absence of any changes in these factors Businessmen would decide to increase employment as a whole, their gain Inevitably there would be less their ask prices.
Apparently, superficial conclusion, according to which reduction Monetary wages increases employment, "as it reduces ", it will be easier to deny production costs, if we track a course
Events, having taken for a basis a hypothesis, most favourable for the similar
Sight, namely: businessmen from the very beginning assume that Reduction of monetary wages will lead to this result. Really, not too improbably that the individual businessman, Seeing that its own production costs are reduced, will not accept
At first in attention of those return consequences which will affect demand on
Its goods, also begins to act, being based on the assumption that it Can sell now with profit of more production, than earlier. If, further, All businessmen will act proceeding from assumptions such,
Whether that will be possible to them to increase the profits actually? It will be possible, if
The company marginal propensity to consumption is equal to unit so that will not be
Rupture between an increment of the income and a consumption increment, or if
The increase of investment corresponding on size to rupture between will take place
Increment of the income and consumption increment, and it will occur only in that
Case when the schedule of a marginal efficiency of the capital will be displaced upwards
Concerning norm of percent. Thus, a gain from realisation of the increased
Production volume will disappoint businessmen and employment again will fall to
The former level, if only a marginal propensity to consumption not It is equal to unit or if reduction of monetary wages does not entail for
Itself of displacement upwards a drawing of a marginal efficiency of the capital rather
Norms of percent that would lead to growth of volume of investments. If Businessmen begin to offer work in such sizes that under a condition
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