BOOK REVIEW 69 It would appear from the above that an equilibrium terms of trade can be found at which industry is on its supply curve and is buying the necessary amount of agricultural goods for'its wage bill. However, that equilibrium has a difficulty and that brings us to the third constraint on industrial output. At this stated equilibrium, industry is selling to agriculture only a part of its output' that represents the wage bill. There is no guarantee that the other part of industrial output representing profits will be sold. Given that the market for industrial goods does not clear through price adjustment, two possible situations are now indicated (except for the event of an accidental equality between supply and demand). One is where industry selling at its supply price fetches the required amount of wage goods, and also finds that at these terms of trade there is more than enough demand for its output. The industrial output in such a case is then supply-constrained and a part of the industrial demand goes unattended. The second possibility is when industry finds that if it were to produce at its supply price and get enough wage goods from the agricultural sector, it could not sell its total output because of a lack of demand. The industry in this case produces less, thus needing less wage goods and therefore establishes a better terms of trade for itself than if it was on the supply curve. Agricultural sector at these terms of trade is absorbing that part of industrial output which cannot be sold to the industrial capitalits on consumption and investment accounts. We have here what can be called a demand constrained situation—the terms of trade that have been established can bring forth a larger industrial output, but it does not materialize for lack of demand. This analysis of the two commodity markets is in some sense a preliminary sketch, to be filled in later by the influences of money, credit and the government. However, the author uses a technique by which he manages to project these influences ultimately on the supply-demand configurations in the two commodity markets. The ultimate outcome can thus be studied by referring to the same types of situations as above, after projecting the impact of money, credit and government activity on them. Money, Credit and the Government In integrating the functioning of the commodity markets with the influence of money, credit and government activities, Rakshit introduces a useful simplification by nothing that in our economy money and credit have their own special spheres of use and a lot of complications that arise from consideration of their substitutability is purely doctrinaire in the Indian context and is better avoided. The demand for money, used mainly for transactions, is influenced by the nominal output levels in the two sectors, while the demand for credit is mostly for production and investment in the industrial sector and for inventory financing in agriculture. Since interest rates are not market clearing, it is the quantity of credit available that influences the inventory decision in agriculture and production and investment decision in industry. Thus the volume of credit and its distribution between agriculture and industry will ultimately affect the positions of the three constraints on