CURRENCY AND PRICE MOVEMENTS 117 
products, live stock, minerals which are used as raw 
materials, stocks and shares, etc., which have a regular 
market, and the production of which cannot be suddenly 
increased. On the other hand, in the case of manufactured 
goods where production is much more elastic, the influence 
of supply and demand on prices is much less certain. In 
many cases, their influence may be nil, because an increase 
in supply meets an increase in demand and they continue 
to balance each other. It may even have a reverse effect, 
because an increase in production may lower the cost 
price by effecting economies in labour or material, or a 
better division of labour, or technical improvements, or a 
greater degree of concentration. If we ask certain classes 
of manufacturers, or if we look back on our own experi- 
ence as consumers, we shall see that an increase in demand 
is hardly likely to provoke a permanent rise in “fancy 
articles,” motor cars and a thousand other industrial pro- 
ducts, so long as their production goes on regularly. 
And so, while the Quantity Theory seems to apply 
inevitably and automatically on the assumption of a 
demand for money—an assumption which is unreal except 
in the case of the exchanges—it works much less exactly 
when we consider the effect of the stock of money on 
the demand for goods. 
Moreover, it is by no means evident that, in accordance 
with Irving Fisher’s premises, a rise in prices, due to 
technical causes, would yield to a decline in demand if 
the stock of money were not increased. It is possible for 
prices to rise while the quantity of available money 
remains stable because consumption may have declined. 
And apart from this, as we have already seen, particularly 
in the case of Czechoslovakia, if a rise in prices is caused 
by some external factor such as the exchange, the neces- 
sary money will create itself in proportion to require- 
ments, and money of account, in default of real money, 
will be increased by means of clearing operations. Con- 
versely, it is perfectly conceivable that a fall in prices 
may take place under the influence of an increase of 
production and competition in selling. The consumer in