The Mechanism of Cycles 101 



the movement of general prices is in opposite direc- 

 tions. 



In Figure 22, the eight curves are drawn. Compar- 

 ing the curves in the two periods for each of the four 

 representative crops we infer that 



(1) the demand schedule or yield-price curve is high 



when the general level of prices is high; and 

 the demand schedule is low when the general 

 level of prices is low; 



(2) the general run of the curves remains nearly the 



same. That is to say, the principal difference 

 between the period of falling prices and period 

 of rising prices is that the yield-price schedules 

 move down or up. 



These are general statements in which quite obvious 

 deviations are ignored and which, consequently, do 

 not pretend to quantitative accuracy. The construc- 

 tion of the curves is dependent upon too few observa- 

 tions to admit of attaching significance to the apparent 

 exceptions to the rule. 



Since the prices of the representative crops are, as we 

 know, dependent upon the yield per acre and the law 

 of the relation between prices and the yield per acre, 

 and since, as we have proved, the yield-price curves 

 move with the general level of prices, our desideratum 

 is to discover what determines the change in the level 

 of general prices. 



