The rise in prices must, therefore, be due to an increased demand, and the first question

In either case there is a similar increase in the volume of currency in India not held by the Government. Atkinson. The second is for the Government or Central Bank to hold resources available abroad, which can be used for maintaining the gold parity of the local currency, when there is the need for it. Secondly. Z feels the want caused by the diminished custom of A, B, & C, and so it does not earn so much; in consequence, it cannot lay out as much on the produce of A, B, & C, and so these do not earn as much either.

Their total amount fluctuates according to the volume of taxes coming in at different seasons of the year, the recency with which loans have been contracted for capital expenditure, the proximity of extraordinary expenditure impending, the receipts of windfalls of income (as, recently, from the opium revenue), the general prosperity of the country, and the degree of caution or optimism which, in the opinion of those responsible for the finances, the general situation warrants.

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