If production is nearing capacity, a considerably increased output will require an increase in capacity. The increased investment that this implies will, in the form of wages, payments for materials, returns to capital and profits, add to purchasing power and the current demand for goods. It does so before the added capacity resulting from the investment is in place to meet the demand. Thus the effort to increase production adds to the pressure on current capacity—and to the prospect for inflationary price increases. A cat chasing its own tail may, by an extraordinary act of feline dexterity,
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