The centre about which the discount fluctuates in my opinion is determined by the profitableness of the business." The statement of determination of the rate of interest for the long run as per Fig. [...] This is shown by the ultimate shift of the marginal efficiency curve to the right from m1 to m2 exactly by the same amount as the shift in the supply curve from s1 to s. When the shift of the marginal efficiency curve to m2 comesabout the rate of interest is determined by the intersection of curves s2 and m2. [...] 2-4 to shift in the same direction; and the effect on the rate of interest of the shift in one is compensated by the shift of the other. [...] Diagrams 1-4 show the one-sided nature of Marshall's theory of interest—with the emphasis on the schedule of the marginal efficiency as the chief determinant of the rate of interest. [...] This is so because in the Keynesian and Marshallian examples (immediate effects of changes in the supply of money on the rate of interest) the supply of loans moves in the opposite direction to the velocity of circulation so that the movements of the one can be described by implication in terms of the associated movements of the other.
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