126 Economic Cycles: Their Law and Cause 



of pig-iron from the general cyclical 

 movement in the production of pig-iron 

 are directly correlated with the devia- 

 tions, in the preceding year, of the 

 yield per acre of the crops from their 

 general cyclical movement ; 

 (b) When the lag in the production of pig- 

 iron and the secular trend in both the 

 production of pig-iron and in the yield 

 per acre of the crops are eliminated, the 

 cycles of production of pig-iron are very 

 closely correlated with the cycles of the 

 yield per acre of the crops. The coeffi- 

 cient of correlation is r = .719. 



(5) Unlike the law of demand for the crops, the law of 



demand for a representative producers' good 

 is such that as the supply increases the price 

 rises, and as the supply decreases the price 

 falls. 



(6) With the falling of the yield per acre of the crops 



there is a falling volume of trade, a falling 

 price of producers' goods, an increase in un- 

 employment, and a fall in the yield-price 

 curves for the crops. The contrary conditions 

 prevail under a rising yield per acre of the 

 crops. 



(7) The ultimate effect upon general prices of the 



process described in (6) is that 



(a) The deviations of general prices from 

 their general cyclical movement are 



