CONTENTS

xi

BOOK III

THE FUNDAMENTAL EQUATIONS OF MONEYCHAPTER 9

PAGE

Certain Definitions ....... 123

(i.) Income, Profits, Savings and Investment . . .123

(ii.) Available and Non-available Output .... 127

(iii.) The Classification of Capital ..... 128

(iv.) Foreign Lending and the Foreign Balance . . . 131

CHAPTER 10

The Fundamental Equations for the Value op Money. . 133

(i.) The Fundamental Equations for the Value of Money . 135

(ii.) The Characteristics of Profit ..... 137

(iii.) The Price-level of New Investment-goods . . . 140

■ (iv.) The Relation of the Price -level to the Quantity of Money . 146

CHAPTER 11

The Conditions of Equilibrium ..... 151

(i.) The Condition of Zero-profits ..... 151

(ii.) The Rate of Interest , or Bank-rate .... 154

(iii.) Inflation and Deflation ...... 155

(iv.) The Causal Direction of Change .... 156

(v.) The Behaviour of Entrepreneurs .... 159

(vi.) The Condition of External Equilibrium . . . 161

(vii.) Changes in Price-Levels due to Spontaneous Changes in

Earnings ....... 166

CHAPTER 12

Tiie Distinction between Savings and Investment . .171

(i.) Savings and Investment ..... 171

(ii.) An Illustration ....... 176

(iii.) Theories of Over-Saving . ..... 178

(iv.) A Summary of the Argument . . . . .179