224 THE GENERAL THEORY OF EMPLOYMENT bk. iv

forces, which operate to reduce the own-rates of interestof other assets, do not operate in the case of money).

It may be added that, just as there are differing com-modity-rates of interest at any time, so also exchangedealers are familiar with the fact that the rate of interestis not even the same in terms of two different moneys,e.g. sterling and dollars. For here also the differencebetween the “spot” and “future” contracts for a foreignmoney in terms of sterling are not, as a rule, the samefor different foreign moneys.

Now each of these commodity standards offers usthe same facility as money for measuring the marginalefficiency of capital. For we can take any commoditywe choose, e.g. wheat; calculate the wheat-value of theprospective yields of any capital asset; and the rate ofdiscount which makes the present value of this series ofwheat annuities equal to the present supply price of theasset in terms of wheat gives us the marginal efficiencyof the asset in terms of wheat. If no change is expected

in the relative value of two alternative standards, thenthe marginal efficiency of a capital-asset will be the samein whichever of the two standards it is measured, sincethe numerator and denominator of the fraction whichleads up to the marginal efficiency will be changed inthe same proportion. If, however, one of the alternativestandards is expected to change in value in terms of theother, the marginal efficiencies of capital-assets will bechanged by the same percentage, according to whichstandard they are measured in. To illustrate this let ustake the simplest case where wheat, one of the alter-native standards, is expected to appreciate at a steadyrate of a per cent, per annum in terms of money; themarginal efficiency of an asset, which is x per cent, interms of money, will then be. x —a per cent, in terms ofwheat. Since the marginal efficiencies of all capital-assets will be altered by the same amount, it followsthat their order of magnitude will be the same irre-spective of the standard which is selected.