Author: Irwin Collier

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Columbia Exam Questions Germany

Columbia. German language exam to satisfy the economics foreign language requirement. Kullmer, 1966

An economics graduate student hoping to pass the German language exam at Columbia in 1966 was required to translate the following one page selected from an article published in German in 1965. Or perhaps the student was expected to read the article and then answer questions posed by the examiner to test the reading comprehension?

Lore Kullmer (née Poschmann, b. 1919; d. 2011) translated Richard Musgrave’s The Theory of Public Finance into German. Shortly thereafter (1967) she was called to an economics professorship at the University of Regensburg.

Columbia. Allowing math to substitute for second foreign language, 1950

___________________________

GERMAN LANGUAGE EXAM
February 1966

DIE PRAKTISCHE BEDEUTUNG DER
STEUERPROGRESSION FÜR DIE GRÖSSE DER
AUFKOMMENSELASTIZITÄT EINER STEUER

Bemerkungen zu Ausführungen R. A. Musgraves
in seiner „Theory of Public Finance“
von
LORE KULLMER*

Kompensatorische Effekte zur Beseitigung von Störungen des wirtschaftlichen Gleichgewichts im privaten Sektor lassen sich u.a. durch die Anwendung des finanzpolitischen Instrumentariums, d.h. konkret durch Änderung des Steuer- und Ausgabenparameter, erzielen. Allerdings erfordert der Zeitbedarf einer mittels diskretionärer Maßnahmen durchgeführten Stabilisierungspolitik ein genügend langsames Fortschreiten der autonomen Änderungen der zu beeinflussenden Faktoren, wenn die Maßnahmen im gewünschten Sinne wirken sollen. Es sind Situationen denkbar in denen eine wirksame Stabilisierungspolitik mit diskretionären Maßnahmen nicht möglich erscheint und jeder Versuch dazu die Abweichungen von Gleichgewichtseinkommen nur ungenügend verringert oder u.U. sogar verstärkt. Hinzu kommt, dass in bestimmten Fällen die Variation finanzpolitischer Maßnahmen überhaupt nicht (oder nicht im notwendigen Umfang) vorgenommen werden kann und/oder sich aus politisch/psychologischen Gründen die häufige Änderung von Steuer- und Ausgabenparametern verbietet.

Die Erkenntnis dieser Zusammenhänge hat die bei entsprechender Ausgestaltung der Instrumente des Finanzsystems in gewissen Umfang vorhandene automatische und unverzüglich wirkende Reagibilität auf Schwankungen des Volkseinkommens im Sinne einer Milderung dieser Schwankungen in den Mittelpunkt des Interesses gerückt und den Ausbau dieses Instrumentariums attraktiv erscheinen lassen.

Der Umfang dieser als built-in flexibility der Budgetgrößen bezeichneten Reagibilität (d.h. die Größe der Anpassung des Aufkommens bestimmter Steuern und der Adaptierung bestimmter Ausgabenverpflichtungen der öffentlichen Hand) kann — von statistischen Daten ausgehend — als Verhältnis der Schwankungen des Finanzsystems zu den Schwankungen des Volkseinkommens gemessen werden.

[Original Source: Public Finance Vol. 20(1965), 1/2, pp. 137-149]

Source: Columbia University Libraries, Manuscript Collections. Columbia University Department of Economics Collection. Carl Shoup Materials. Box 11, Folder “Economics — Memoranda”.

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Exam Questions Money and Banking UCLA

UCLA. PhD Qualifying Exam, Money. May 1974

This post adds a third Ph.D. qualifying exam for the field of monetary economics at UCLA found in the papers of Robert W. Clower at the Economists’ Papers Archive at Duke University. 

In other news, the U.S. House Committee on the Judiciary was between its first (May 9) and second (July 24) days of hearings regarding the impeachment of Richard Nixon.

_____________________________

UCLA Qualifying Exams, Money
Previously posted

May 1971
May 1973

_____________________________

Spring Quarter 1974
May 24, 1974

Ph.D. Qualifying Examination
MONEY

Four Hours

INSTRUCTIONS: Answer all of the following eight questions. Be as specific and rigorous as possible. There is plenty of writing time to answer all of the questions satisfactorily so try to spend a sufficient amount of time thinking before beginning to write. Irrelevant material presented, however correct, will be penalized.

  1. State whether each of the following statements Is true, false, or uncertain and then briefly explain your answer. Your grade depends entirely upon your explanation.
    1. In countries which undergo frequent, large changes in the rate of monetary growth, changes in the rate of monetary growth have little impact on real income compared to the effect those changes would have had had monetary growth been more stable.
    2. No great error is introduced into the analysis of aggregate demand by assuming that the real income elasticity of the demand for money is unity for short-term fluctuations.
    3. Lags in the adjustment of the rate of inflation to changes in the rate of growth of the money supply imply a cyclical adjustment of the rate of inflation.
    4. If governments do not intervene, floating exchange rates imply a zero balance of payments deficit on the liquidity basis.
    5. A lag in adjustment of the rate at which banks pay interest on demand deposits implies a larger short-run than long-run effect on aggregate demand from equal changes in government spending and borrowing.
    6. If all wage contracts had escalator clauses (i.e., were tied to the price level), inflation would be self-perpetuating.
  2. According to a well-known principles textbook: “The general price level usually rises when GNP is high relative to the physical productive capacity of the economy; similarly, prices generally decline when GNP is low relative to capacity, as during the 1930’s.” In fact, wholesale prices in the U.S. declined almost 50% between 1869 and 1890 although output was generally high relative to capacity during most of this period; and wholesale prices rose nearly 50% between 1932 and 1938 although unemployment during these years ranged between 17% and 25% of the labor force.
    Suppose a diligent student in a class you are teaching confronts you with the quotation and the facts above, How would you answer?
  3. An economist recently wrote a letter to the Wall Street Journal complaining that much discussion of how to control Inflation has been based on a neo-quantity theory which emphasizes the “quantity of money” while ignoring the “quality of credit.” Central banks (he noted) have been established to regulate commercial bank assets, but current discussion and policy concentrates on the liability side of the commercial bank balance sheet and entirely ignores the asset side. He maintained that if, for example, commercial banks were forced to limit their lending activity to short-term, self-liquidating business loans, inflation would quickly be controlled. What do you think of this argument? Explain in detail.
  4. “Only real magnitudes appear as arguments in individual utility functions; accordingly, the rate of inflation of money prices (a strictly nominal phenomenon) is of no welfare significance for individuals or for society at large.” Discuss critically.
  5. A recent Wall Street Journal article noted the rapid rise both in the level of short-term interest rates and in the rate of growth of money that has occurred over the past few months. The reporter explained this phenomenon by asserting that individuals in the money market took the increase in the rate of growth of money as an indication that the Fed would later have to tighten up and therefore bid up interest rates in anticipation of this. Carefully evaluate this explanation and, if you disagree with it, present an alternative explanation.
  1. The recent rise in short-term interest rates has led to much talk about financial disintermediation.
    1. Describe this process of “disintermediation.”
    2. What is the effect of “disintermediation” on the rate of growth of money?
    3. What are the socially harmful effects of such “disintermediation?”
    4. What changes in financial institutional arrangements would you suggest to prevent such “disintermediation” from occurring?
  2. The Panamanian monetary unity is the same as that of the United States, and the circulating medium consists of U.S. coins and paper dollars. The Panamanian government cannot issue currency (it does mint coins, but this can be neglected from this problem), nor does Panama have a central bank. What monetary and fiscal tools would be available to the Panamanian Minister of Economics? What contracyclical policies are possible under what conditions?
  3. There has been much discussion recently of the effects of international conditions on domestic inflation. Discuss the effects of each of the following foreign factors on the U.S. inflation rate, making explicit any assumptions you are using in your analysis.
    1. a world-wide boom
    2. a Russian wheat failure
    3. an Arab oil boycott

Source: Duke University. Economists‘ Papers Archive. David M. Rubenstein Rare Book & Manuscript Library. Robert W. Clower papers, Box 4, Folder “Monetary Economics PhD exams. Reading list, exams UCLA 1971-1988”.

Image Source: UCLA Daily Bruin at archive.org.

Categories
Economists Harvard

Harvard. Annual report on the department of economics. Dunlop, 1961-1962

John T. Dunlop

An overview of the annual comings and goings of a department are typically chronicled in a report prepared by the department chair. Such low circulation documents are sometimes targeted to a specific readership, e.g. a visiting committee, a dean, the alumni, but the report transcribed in this post for the Harvard economics department in 1961-62 does not appear to have had a particular audience in mind.

___________________________

About  Chairman John T. Dunlop
(Harvard Album, 1960)

Sallying forth from an office in the farther reaches of Littauer to Washington, D.C., JOHN THOMAS DUNLOP, Professor of Economics and faculty member in the Graduate School of Public Administration, is certainly one of the university’s most travelled professors. Dunlop, a labor expert, teaches an undergraduate course on unionism and public policy applying to labor relations and problems; in the grad school he conducts two seminars, in one of which he had worked closely with the late Professor Slichter. But in addition to his teaching, Professor Dunlop is one of the country’s leading strike arbitrators, and he figures that he travels in the vicinity of 150,000 miles a year on this outside work. The occasion for a weekly trip to the nation’s capital is his post as the impartial chairman of a joint committee in the construction industry, comprising representatives of the eighteen major unions and contracting firms. In this position Professor Dunlop must mediate disputes between the union and management. He is also a permanent umpire for the women’s garment industry and in the past has served in similar capacities for the brass companies of Connecticut and the bituminous coal producers. The dispute in 1955 involving the complexities of the ratio of required conductors to the length of a freight train called him back to the role of mediator, following a long term with the Atomic Energy Labor panel. At present he edits the Wertheim series on the histories of various big corporations and unions, and he also administers a Ford Foundation grant to study the functionings of labor and management in the underdeveloped countries of Asia.

Professor Dunlop was born in the Forty-Niner gold region and graduated from the University of California in 1935. He has been with Harvard since 1938, when he joined the faculty as an instructor. He gets back to California at least once a year, and the last time he returned he did so by travelling eastward via Indonesia. Professor Dunlop lives in Belmont, and, when not compiling mileage, he devotes his time to his wife and three children, and concentrates on his tennis game.

Source: The Harvard Album, 1960, p. 29.

___________________________

Previously posted departmental reports

Department Reports to the Dean (1932-41)
Department Reports to the Dean (1942-1946)
Department Reports to the Dean (1947-1950)
Department Report to the Dean (1955-56)
Department Newsletter (June 1960)

___________________________

June 26, 1962

Report
Department of Economics, 1961-1962

1. Staff

Professor Gerschenkron was Taussig Research Professor for the year, and Professor Albert J. Meyer, lecturer in the Department, was also on leave. Professor Galbraith and Kaysen continued on leave in government appointments. During the spring term Professor Harris was on sabbatical leave; Professor Bergson held a Ford Faculty Research Fellowship, and Professor Leontief was Visiting Professor at the College du France, Paris. Assistant Professors Gill and Vanek were also on leave throughout the year.

As a consequence of the number of senior members on leave, the Department included this year a relatively large number of visiting professors and lecturers. Professor Jesse Markham of Princeton University taught the courses in industrial organization; Dr. Frank Spooner was in charge of economic history; Professor William H. Nicholls of Vanderbilt instructed in agriculture and economic development. Professor Jacob Viner was Taussig Research Professor, and while he taught no courses, we were delighted to have him with us for the year. Professor Schmookler of Minnesota was associated with the science and public policy seminar of the Littauer School, and was a visiting lecturer in the Department. In addition, Professor Domar of M.I.T. taught a course in the Soviet economy in the spring term. Mr. Langley gave courses ordinarily taught by Professor A.J. Meyer, and Professor Caleb Smith of Brown University continued to teach the accounting course.

2. New Appointments

       The Executive Committee unanimously recommended the appointment of Professor Richard Caves as a permanent addition to the Department. Following the established procedures, the governing boards on May 14, 1962 voted his appointment as Professor of Economics effective July 1, 1962. Professor Caves completed his Ph.D. degree in the Department in 1958 and has been on the staff at the University of California (Berkeley) since 1957. He has been vice-chairman of the Berkeley Department. The appointment of Professor Caves will materially strengthen the Harvard Department, particularly in the fields of international trade and industrial organization. Moreover, he is regarded as an excellent undergraduate teacher.

       The Department unanimously recommended and the President and governing boards approved the appointment of four new assistant professors starting July 1, 1962: Clopper Almon, Jr., Elliot Berg, Phoebus Dhrymes, and Thomas Wilson. It is planned that these assistant professors in the Department will devote part time to research and be paid in part from research budgets. Such arrangements, combined with the higher salary scales starting July 1, 1962, should facilitate the recruitment of first rate assistant professors; it has often been difficult in the past to fill this rank in this Department.

       In approving these four appointments on March 5, 1962, President Pusey stated:

“It is my understanding that these four new Assistant Professors will devote part of their five-year tenure to special research projects and that an appropriate fraction of their salaries during these periods will be charged against the project budgets. I approve in principle the idea of experimenting in this way with charging portions of the salaries of assistant professors to grants or contracts, provided these grants or contracts are of sufficient duration to avoid the danger of funds running out when there are still large salary commitments in excess of our normal academic salary budget. Thus I feel that we should move with caution in this direction, treating the above appointments as experimental, and waiting for the results to become apparent before venturing further along this road.”

3. Chair in Modern China Studies and Economics

       The primary responsibility for filling this chair has now been placed in the Department of Economics. After a series of conferences with the East Asia Research Center of Harvard University, President Pusey approved the arrangements under which the Department will seek a permanent appointment competent in Economics and with a command of the Chinese language. In the meanwhile, the Department is to be responsible for providing some instruction on term appointments in the field and is to have the use of the income of the endowment for such instruction and to develop promising scholars in this field.

       Professor Kuznets is to be Chairman of the Committee of the Department to seek appropriate appointments. It is expected that Mr. Dwight Perkins, a graduate student in the Department, will provide a half course of instruction on the Economy of China in the spring term, 1963.

4. Undergraduate Program

       The enrollment in the undergraduate courses in the Department has grown in the last several years. The aggregate enrollment in undergraduate courses was 926 in the fall of 1959 and 1375 in the fall of 1961; the aggregate enrollment was 1080 in the spring term of 1960 and 1281 in the spring of 1962. These figures include the enrollment in Economics 1 which averaged 540 in 1959 and 628 in 1962. It is thought that these increases in part reflect the reorganization of the undergraduate program placed into effect in the fall of 1960 following several years of work on the part of the committee on undergraduate instruction. The division of full year courses into half year courses, the arrangement of courses into four groups according to prerequisites and level of difficulty, the lectures in Economics 1 and the addition to the curriculum of a few new courses is thought to have stimulated enrollment.

       Despite the increases in enrollment in undergraduate courses, the Department faces a serious continuing problem to maintain and to increase the number of concentrators in the field. The percentage of all concentrators who elect the field of Economics has declined from 7.7 percent in 1956-57 to 6.0 percent in 1960-61. The low concentration in Economics at Radcliffe is of particular concern to the Department, and conferences seeking to increase interest among the students have been held with President Bunting and other members of the Radcliffe staff.

       In order to improve the quality of our instruction, Economics 98 (junior tutorial) is to be reorganized. The adoption of the Gill plan by the Faculty materially increased the number of students in Economics 98 from 40 or 50 to more than 80. The instruction in economic theory by lectures has proven to be inappropriate with the larger group. Next year, 1962-63, it is planned to divide the group into three or four seminars, each of approximately 20 students; each seminar is to be under the direction of a senior member of the Department or an assistant professor. In addition, tutorial groups of four or five students will meet with individual tutors. Professor Caves has been given overall responsibility for this important part of the undergraduate program.

5. Graduate Instruction

       There was a total of 48 first year graduate students in the Department this year including 5 women and 3 enrolled through Littauer. There were 88 continuing graduate students including 6 women, 6 from Littauer, and 2 in joint degrees, for a total of 136 graduate students; in addition, the Department had 10 special students and 10 special auditors. A total of 21 Ph.D. degrees were awarded to students in the Department of Economics.

       The competition for places in the graduate schools for work in the Department of Economics has grown more severe in recent years. From the more than 260 applications for admission to the Graduate School of Arts and Sciences received in the spring of 1962, there will only be about 45 new graduate students in the fall of 1962. Almost half of these students will be from outside the United States and Canada. For the fall of 1962 we have been able to obtain the admission of 8 out of the first 10 on our list, a considerably higher fraction than in recent years.

       The Department faces strong conflicting pressures in making decisions on the number of new graduate students to be admitted. On the one hand, the Department is anxious to provide individual instruction particularly after the first year of graduate study for the highest quality students. A greater enrollment would also complicate materially the teaching of the required graduate courses in economic history, statistics and theory, and after a point would require further manpower so that two senior members of the Department might give parallel courses or sections. On the other hand, the Department is anxious to make its contribution to the increased demands for economists particularly for developing countries. Moreover the quality of a number of the students rejected for admission (perhaps as many as 15 to 20) appears to be very good. In the selection of students from abroad it is particularly difficult to know whether one has made the best selections. When students are admitted whose records turn out to be poor, there are often many complications for both the student and the University. The Department has spent considerable energy in reviewing the records of students admitted during the past decade; a careful statistical study was made under the direction of Professor Houthakker. The Department is continuing to seek to improve admission procedures.

         Financial resources available to the Department for its own use for scholarships and fellowships is a serious problem since the money made available by the generous gift of Mr. Roger Kyes has now been exhausted.

6. Organization of the Department

The Department now performs much of its routine business through committees. The two major committees are on Undergraduate Instruction under Professor Eckstein and on Graduate Instruction under Professor Dorfman.

7. Research

         A very large amount of research activity is carried out by members of the Department of Economics. In addition to individual research by senior members, an increasing number of research projects which employ a number of graduate students and junior staff are being conducted under the direction of senior members. These research projects often provide opportunities for training of graduate students in research methods and afford topics and financing for Ph.D. dissertations.

         Among these research projects with financial support are the following:

Professor Leontief Harvard Economic Research Project which has recently been refinanced for a period of years.
Professor Mason The relations of government and business in economic development.
Professor Mason and Dr. Papanek Overseas operations and training
(Center for International Affairs)
Professor Kuznets Economic growth
Professor Eckstein Economics of public expenditures
Professor Houthakker Forecasting consumers’ expenditures
Professor Harris Education and Public Policy
Professor Schelling Defense studies and Experimental Study of Bargaining
Professor Dunlop Labor-Management History and Economics of Medical Care
Professor Duesenberry Capital Markets
Professor Meyer Business Decisions
Professor Bergson Soviet Economics
Professor Gerschenkron Economic History Workshop

8. Public and Professional Activities

         A number of members of the Department were engaged in a wide variety of professional activities and public service during the year. A few instances may be of interest; no attempt is made for a complete listing.

         The president of the American Economic Association comes from this Department two years in a row. Professor Mason is president for 1962, and Professor Haberler is president-elect.

         Professor Leontief was chairman of the International Conference on Input-Output Techniques held in Geneva, Switzerland in September 1961 and sponsored by the Harvard Economic Research Project in association with the U.S.[sic] Secretariat. He was also a member of the Commission of Experts for the United Nations which reported on the Social and Economic Consequences of Disarmament.

         Professor Dorfman served as a member of the President’s Scientific Advisory Committee team on Waterlogging and Salinity in West Pakistan. He is also a member of the President’s Committee to Appraise Employment and Unemployment Statistics.

         Professor Harris is serving as Economic Advisor to the Secretary of the Treasury and is a member of the Public Advisory Board of the Area Redevelopment Program.

         Professor John R. Meyer served as a consultant in connection with the President’s message on Transportation Policy.

         Professor Kuznets is Chairman of the Committee on the Economy of China of the Social Science Research Council.

         Professor Bergson is a member of this same Committee and chairman of the Joint Committee of Slavic Studies of the Social Science Research Council and the American Council of Learned Societies. His study, The Real National Income of Soviet Russia Since 1928, was published in 1961 by the Harvard University Press.

         Professor Mason is Chairman, Advisory Committee, A.I.D.

         Professors Duesenberry, Eckstein and Smithies have been consultants to the Council of Economic Advisors. Professor Duesenberry was on the staff of the Commission on Money and Credit and was chairman of the Joint Economic Committee’s Inventory Study Committee.

         Professor Schelling has been a consultant to the Department of Defense and to the Scientific Advisory Board of the Air Force. His study Strategy of Arms Control (with Morton J. Halperin), was published by the Twentieth Century Fund in 1961.

         Professor Houthakker has worked on revenue forecasting problems for the Department of the Treasury.

         Professor Dunlop was a member of the Presidential Railroad Commission (1960-1962), and is a member of the President’s Missile Sites Labor Commission. He was Chairman of the International Conference on Labor Productivity under the auspices of the International Economic Association held August-September 1961.

9. Visiting Committee

         A series of meetings this year with the Chairman of the Visiting Committee, and others of its members, have improved the relations between the Visiting Committee and the Department of Economics. I believe these new attitudes are reflected in the annual report of the Committee. There is a genuine desire on the part of both the Department and the Committee for a constructive relationship.

___________________
John T. Dunlop
Chairman

Source: Duke University. Economists’ Papers Archive. David M. Rubenstein Rare Book & Manuscript Library. Edward H. Chamberlin Papers, Box 17, Folder “Economics Department 1960-62”.

Image Source: The Harvard Class Album 1960, p. 29.

Categories
Economists Wisconsin

Wisconsin. Meet Assistant Professor of Economics, Allyn Abbot Young. 1907

Back when graduating classes were significantly smaller, college and university yearbooks often presented members of the faculty. The University of Wisconsin-Madison libraries have digitized its “The Badger” yearbooks from 1885 through 2014. The portrait of Allyn Abbot Young above and the text below come from the 1907 yearbook.

_________________________

Allyn Abbot Young, Ph.D.
ASSISTANT PROFESSOR
OF POLITICAL ECONOMY.

ALLYN ABBOT YOUNG was born Sept. 19, 1876 at Canton, Ohio. His early education was secured in the public and private schools of Sioux Falls, S.D. In 1894 he received the degree of Ph.B. from Hiram College in Ohio. For four years Professor Young was engaged in business and journalism; then in 1898 he took up graduate work at the University of Wisconsin, where he was instructor in Economics for the year 1901-1902. In 1902 he took the degree of Ph.D. from the same institution. For the next two years he was at the head of the department of Economics in Western Reserve University, at Cleveland Ohio. In 1904 he was made assistant professor of finance at Dartmouth College, and in 1905 was appointed assistant professor of Economics at the Universitv of Wisconsin.

The publications of Professor Young have been mainly along the line of statistics, including a discussion of age statistics published by the Federal Census of 1900.

Source: University of Wisconsin. The Badger 1907 (Vol. XXI), p. 64.

Categories
Chicago Exam Questions Microeconomics

Chicago. Preliminary Graduate Examination in Economic Theory. Winter Quarter, 1963

 

A necessary condition for becoming a certified Chicago economist is to have cleared the hurdle of the prelim exam for price theory. With this post we fill in a gap in our fine collection of price theory prelims that has now grown to a baker’s dozen (i.e. 13).

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Chicago Price Theory
Preliminary/Core Exams
Previously Posted

Summer 1949
Summer 1951
Summer 1952
Winter 1955
Summer 1955
Winter 1957
Winter 1958
Summer 1960
Winter 1964
Winter 1965
Winter 1969
Summer 1975

____________________

CORE EXAMINATION
Price Theory
Winter 1963

Preliminary Examination for the Ph. D. and A.M. Degrees

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the examination will be sent to you by letter.

Answer all questions.

Time 3 hours.

  1. (60 points) Indicate whether you believe each of the following statements to be true, false, or uncertain. In each case write a few sentences explaining your answer. Your grade will depend heavily on your explanation.
    1. If the rate of obsolescence is constant over time for each type of capital equipment, a rise in the rate of interest will shorten the optimal life of capital equipment.
    2. If oranges are substitutes for apples, apples are complementary to cheese, and cheese is a substitute for butter, oranges and butter are complements.
    3. If a certain commodity is rationed and subject to price control, and there is a black market price for it, the black market price is the equilibrium price of the commodity in the absence of price control.
    4. Let Σipi1xi1 and Σipi2xi2 be the expenditure of a firm on factors of production per unit of output at two points in time. If Σipi1xi2 > Σipi1xi1 and Σipi2xi1 < Σipi2xi2, the production function of the firm has changed between the two points of time.
    5. A company cannot have a monopoly if its shareholders receive only the normal rate of earnings on their stock in it.
    6. If the production function of an Industry is subject to constant returns to scale, the industry supply curve will be horizontal.
    7. If it were possible to travel backwards as well as forwards in time, everyone would be a millionaire.
    8. The development of better fertilizer will increase the value of farm land.
    9. Manufacturers frequently advertise that their products contain extra ingredients, and they generally succeed in selling “extra-ingredient” products (e.g. Bufferin) at higher prices than “similar” single-ingredient products (e.g. aspirin). This implies that consumers have a diminishing marginal rate of substitution between the ingredients.
    10. The removal of a barrier to competition anywhere in the economy must make society better off.
    11. Given:
        1. a three-product world,
        2. the cross-elasticity of demand of x with respect to the price of z is zero,
        3. the own-price elasticity of demand for x is -1,
        4. y and z are substitutes,
        5. expenditures on X occupy half of consumers’ budgets, expenditures on Y one quarter of consumers’ budgets in the initial situation,

it follows that the own-price elasticity of demand for y is greater than 1.5 in absolute value. (For this question consider all price-elasticities defined to include the substitution effect only.)

      1. The price-elasticity of demand on the part of a competitive industry for a factor of production will be greater, the smaller is the share of that factor of production in the total costs of the industry in question.
      2. If production in industry X (assumed to be competitive) is governed by a Cobb-Douglas production function, then no wage set by the trade union in that industry will produce greater total labor income than any other wage.
      3. A tax of a fixed amount per unit of output, placed upon the product of an industry with constant costs, will necessarily result in a smaller rise in price if that industry is organized (and behaves) as a monopoly than if the industry is competitive.
      4. In an industry employing just two factors of production, the elasticity of demand on the part of that industry for either factor must be less in absolute value than the elasticity of substitution between the two factors in that industry.
  1. (15 points) The University City Art Theater, a motion picture house showing foreign films, has the following price policies: The basic admission price is $1.00 for evening performances and 60 cents in the afternoon. Registered university students are admitted at half price at all times. A member of the University’s economics department has complained that the theater is a discriminating monopolist and should be required by local ordinance to follow a one-price policy. Comment on the desirability of this recommendation.
  2. (25 points)
    1. Industry X is composed of 10 firms, and organized as a cartel. The pricing policy of the cartel is determined by the following rule: each firm will produce one-tenth of the output of the whole industry, and the price set for the final product will be just equal to the marginal cost of production in the firm with the highest marginal cost. Show how you would measure the welfare cost of this arrangement, as compared with a competitive equilibrium.
    2. The firms now merge into a single monopoly firm, the previous 10 firms now becoming 10 divisions of the new company. All ten divisions continue to operate and have the same marginal cost functions as they did when operating separately. Show how you would measure the welfare costs of this new arrangement. Under what circumstances, if any, would these welfare costs be lower than those of case A?
    3. The government now intervenes to break up the monopoly. The same 10 firms as existed in case A are reconstituted; collusion is somehow prevented; and merger is precluded by a requirement that no firm shall expand the total volume of its capital. Assume that the firms begin operating under this new arrangement with each of them having the amount of capital resulting from a long-run equilibrium under case B, and that the firms behave competitively. How would you measure the welfare costs of this arrangement? Under what circumstances, if any, would these welfare costs exceed those measured under case B?

Source: Harvard University Archives. Papers of Zvi Griliches. Box 129, Folder “Preliminary Examinations, 1957-1965.”

Categories
Exam Questions France Germany Harvard History of Economics

Harvard. Exam questions for 19th century French and German economists. Gay, 1908-09

Friedrich Benedict von Hermann (ca. 1850)

Nine Harvard graduate students were registered for Professor Edwin F. Gay’s reading seminar on French and German economists of the 19th century. I’d be very surprised if there were a U.S. department of economics today in which one would find nine graduate students who could read both of those languages. But that was then when it would have beeen difficult to find an economics department with nine graduate students who could handle a second year undergraduate math class of today. 

Incidentally, there was no mid-year final exam for this course included in the printed collection of mid-year final exams in 1908-09.

________________________

Previously offered

1903. Exam for German Economic Thought

1906-07. Exam for 19th century French and German Economics

________________________

Course Enrollment
1908-09

Economics 22. Professor Gay — German and French Economists of the Nineteenth Century.

Total 9: 9 Graduates.

Source: Harvard University. Report of the President of Harvard College, 1908-1909, p. 67.

________________________

Course Description

[Economics] 22. German and French Economists of the Nineteenth Century. Two consecutive evening hours per week, to be arranged with the instructor. Professor Gay.

In this course selections from the works of a number of the more important German and French economists will be read and informally discussed. The influence of the English classical school will be traced, together with the criticism directed against this school by the socialists and the historical economists. Attention will also be given to the question of methods in economic investigation.

A moderate reading knowledge of German and French will of course be necessary.

Source: Official Register of Harvard University, Vol. V, No. 19
(1 June 1908). History and Political Science Comprising the Departments of History and Government, and Economics, 1908-09, p. 51.

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ECONOMICS 22
Year-end Examination, 1908-09

  1. State critically the position of Sismondi, Rodbertus, Bastiat, and Wagner on rent.
  2. Von Thünen and Le Play.
  3. Discuss the German historical school.
  4. (a) Estimate the work of St. Simon, Fourier, Rodbertus, Marx.
    (b) Comment on Wagner’s criticism of Socialism.
  5. Translate and comment on the following passage:—
    „Die wahre und immer neu fliessende Quelle der Vergeltung der Produktivarbeit ist das Einkommen des Käufers, der ihr Produkt für den eigenen Bedarf kauft. Das Kapital des Unternehmers einer technischen Produktion ist daher nur das Mittel, die auf jeder Produktionsstufe erforderliche Arbeit dem Produkt einzuverleiben und dieselbe am Ende dieser Bearbeitung im Produkte zu verkaufen. Es ist in keiner Weise der Fond, aus dem der Lohn bezahlt wird. Dass die Quelle des Lohnes das Kapital der Unternehmer sei, ist nicht blos theoretisch irrig, sondern auch in praktischer Beziehung eine höchst bedenkliche Lehre, weil sie den Arbeiter in der oberflächlichen Ansicht bestärkt, der Unternehmer sei sein Arbeitgeber und von diesem hänge die Höhe seines Lohnes ab.“

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1908-09; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1909), pp. 50-51.

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Cf. Original German Text

„Die wahre und immer neu fliessende Quelle der Vergeltung der Produktivarbeit ist das Einkommen des Käufers, der ihr Produkt für den eigenen Bedarf kauft.
…Das Kapital des Unternehmers einer technischen Produktion ist daher nur das Mittel, die auf jeder Produktionsstufe erforderliche Arbeit dem Produkt einzuverleiben und dieselbe am Ende dieser Bearbeitung im Produkte zu verkaufen…Es ist in keiner Weise der Fond, aus dem der Lohn bezahlt wird.

[two pages later]

…Dass die Quelle des Lohnes das Kapital der Unternehmer sei, ist nicht blos theoretisch irrig, sondern auch in praktischer Beziehung eine höchst bedenkliche Lehre, weil sie den Arbeiter in der oberflächlichen Ansicht bestärkt, der Unternehmer sei sein Arbeitgeber und von diesem hänge die Höhe seines Lohnes ab.“

Source: Staatswirthschaftliche Untersuchungen von Friedrich Benedict Wilhelm von Hermann  (2nd edition, München, 1870), p. 476 and p. 478.

Fun fact: the previous links take us to Allyn A. Young’s copy of Hermann.

Categories
Exam Questions Fields International Economics M.I.T.

M.I.T. General Exam for International Economics. May 1974

Charles P. Kindleberger

This general exam from the Spring of 1974 was fished from Charles Kindleberger’s papers in the M.I.T. Archives. Probably the questions in the first part were of Jagdish Bhagwati’s doing and those in the second part were chosen by Kindleberger.

_________________________

Previously transcribed and posted
General Exams
for International Economics

1959
February and May 1966

_________________________

Previously transcribed and posted
Kindleberger’s Course Exams
for International Economics

1950-51
1954-55
1961-67

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[Handwritten note: “Wednesday May 22, 1974”]

GENERAL EXAMINATION IN INTERNATIONAL ECONOMICS

Three hours.

Part I answer two questions;
Part II answer two questions.

All questions have equal weight (45 minutes each).
Write your answers to Parts I and II in separate books.

Part I

  1. Murray Kemp believes that, with regard to factor price equalization,

“…the conditions never have been nor will be satisfied in practice… Nevertheless, the “factor price equalization theorem is important if only because it focuses attention on the obstacles to equalization.”

What is your opinion about the importance and relevance of the factor price equalization theorem?

  1. What Is the case for free trade?
  2. Assume that the price of oil relative to other goods will continue at its present level for at least the next half decade. What does international trade (and not balance of payments) theory predict about the effects of the price increase on importing countries?

Part II

  1. Describe and evaluate the monetarist explanation of the balance of payments of a single country. If you choose, you may include a discussion of the reasons why this explanation has made progress at the expense of others.
  2. With liberal policies in trade and capital movements and national responsibility for employment and inflation, is the international economic system overdetermined? Discuss in relation to international monetary arrangements on the one hand, and the possibility of giving up policy instrument on the other.
  3. Discuss the balance-of-payments problem, its origin and possible cure of one of the following: Germany, Italy, the United States, any Latin American country you choose, Saudi Arabia, India.

Source: Institute Archives and Special Collections, MIT Libraries. Charles Kindleberger Papers, Box 22, Folder “Examinations International Economics 1959-75”.

Source: Portrait of Charles Poor Kindleberger at the MIT Museum website. Colorized by Economics in the Rear-view Mirror.

Categories
Chicago Exam Questions Microeconomics

Chicago. Preliminary Graduate Examination in Economic Theory. Winter Quarter, 1958

The collection of price theory prelim exams from Chicago here at Economics in the Rear-view Mirror has just grown by another exam. What is particularly noteworthy about the copy that I have just transcribed is that it appears to have been recycled as a problem set sometime later by Zvi Griliches when he taught the second quarter of Chicago price theory, Economics 300b.

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Chicago Price Theory
Preliminary/Core Exams
Previously Posted

Summer 1949
Summer 1951
Summer 1952
Winter 1955
Summer 1955
Winter 1957
Summer 1960
Winter 1964
Winter 1965
Winter 1969
Summer 1975

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Note in pencil at top of page:

30 copies, Griliches Weds. 
300B Griliches Feb. 
take home problems

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ECONOMIC THEORY
Preliminary Examination
for the Ph.D. and A.M. Degrees
Winter Quarter 1958

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the examination will be sent to you by letter after results on all preliminary examinations have been received.

Answer all questions. Time: Four hours.

Total Points: 240 (Equals number of minutes allowed for the examination.)

  1. (60 points) Develop the major aspects of the theory of a competitive firm, and compare it with the theory of consumer behavior. What are the similarities and the differences between the two theories and the concepts used in each?
  2. (50 points) Analyze briefly each of the following propositions: Marginal productivity analysis…
    1. proves that the existing distribution of income is ethically just;
    2. provides a basis for understanding the demand for factors of production;
    3. is a complete theory of the determination of the prices of production;
    4. provides a basis for understanding the supply of factors of production;
    5. does not apply in the case of fixed proportions.
  3. (50 points) Indicate briefly the meaning of each of the following phrases, identify the economist (or economists) associated with each, and state some of his major contributions to economics:
    1. Engel’s Law
    2. Say’s Law
    3. Iron Law of Wages
    4. Schumpeterian innovators
    5. Conspicuous consumption
    6. Contract curve
    7. Elasticity of demand
  4. (40 points) In calculating whether the government ought to undertake certain investment projects, a rate of interest is frequently used. How in principle would you determine what rate of interest is appropriate?
  5. (40 points) It is argued in connection with the development of underdeveloped countries that basic industries such as steel should be developed by the government, since private investors will neglect the external economies brought to other industries by low-cost steel, and therefore will underinvest. Evaluate this argument. For what general class or classes of cases is the argument correct?

Source: Harvard University Archives. Papers of Zvi Griliches. Box 130. Folder “Preliminary Examinations, 1957-1965”.

Image Source: Social Science Research Building. University of Chicago Photographic Archive, apf2-07490, Special Collections Research Center, University of Chicago Library.

Categories
Exam Questions Harvard Law and Economics

Harvard. Exam for semester course on laws governing industrial relations. Wyman, 1908-1909

Like William Morse Cole’s accounting class, Bruce Wyman’s course on aspects of business law was a relatively popular course taken by undergraduate economics majors at Harvard in the early 20th century.

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From earlier years

1901-02. Autobiographical note for Bruce Wyman, enrollment, course description, syllabus, exams.
1902-03. Wyman Obituary, enrollment, course description, exams.
1903-04. Enrollment and exams.
1904-05. Enrollment, course description, exams.
1905-06. Enrollment, paper assignments, exams.
1906-07. Enrollment, paper topics, exams.
1907-08. Enrollment, exams.

__________________________

Course Teaching Assistants
1908-09

Dana Brannan (A.B. Harvard 1905; LL.B. Harvard, 1910).

Brannan went on to become a reporter and ultimately obituary editor for the New York Times. His mother was the prominent suffragist, Eunice Dana Brennan, a daughter of the founder and editor of the New York Sun, Charles A. Dana.

Harries Arthur Mumma (cum laude, A.B. Harvard 1907; LL.B. Harvard 1909).

Mumma went on to teach law at George Washington University and Fordham University before becoming a partner in the New York law firm of Mumma, Crane and Costabell for 40 years.

Source: Harvard University. Quinquennial catalogue of the officers and graduates 1636-1930, pp. 1038-39.

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Course Enrollment
1908-09

Economics 21 1hf. Professor Wyman, assisted by Messrs. Brannan and Mumma. — Principles of Law governing Industrial Relations.

Total 163: 3 Graduates, 103 Seniors, 44 Juniors, 10 Sophomores, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1908-1909, p. 68.

__________________________

Course Announcement
1908-09

This course along with Economics 18 (Elements of Accounting)
“…is designed more particularly to aid in the understanding of the problems likely to be met in business life, and is arranged with special regard to the needs of those looking to such a career. They are primarily for students who have reached or approached the close of their general education.”

[Economics] 21  1hf. Principles of Law governing Industrial Relations. Half-course (first half-year). Mon., Wed., Fri., at 12. Professor Wyman.

Course 21 is not open to students before their last year of undergraduate work. The course considers certain rules of the law governing the course of modern trade and the organization of modern industry. The problems brought forward are actual and the rules of law discussed are specific, so that the instruction may prove of service in a business career. The course forms a natural introduction to the study of law, as it involves many of the elementary principles. And as the course deals with adjudication and legislation on questions of first importance in the economic development of modern times, it may also be of advantage to all those who wish to equip themselves for the intelligent discussion of issues having both legal and economic aspects. In 1908-09 five principal topics will be discussed: Competition; Combination; Association; Consolidation; Regulation; — some very briefly, some with more detail. The conduct of the course will be by the reading and discussion of cases fromthe law reports which are contained in an edited series of case books.

Source: Official Register of Harvard University, Vol. V, No. 19
(1 June 1908). History and Political Science Comprising the Departments of History and Government, and Economics, 1908-09, p. 57.

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ECONOMICS 21
Mid-year Examination, 1908-09

  1. A manufacturer of patent medicine attacks the proprietors of another medicine thus: “They do not dare to publish their formula; our own belief is that it is poisonous; we have known of cases where people have died after taking their medicine, and of other cases where our warnings have been in time and patients have changed over to our medicine and have been entirely cured. We not only say that ours is the best medicine for this disease, but we say further that theirs is the worst. At the same time you pay $1.00 for their concoction, and 50 cents for our medicine.” Would you say there was anything in this advertisement for which suit could be brought?
  2. In a strike for shorter hours a union publishes advertisements requesting men not to take their places, posts a picket of two men near the mill gates, declares that it will not deal with grocers who sell to scabs, and gather at the railroad stations shouting warnings to incoming strike-breakers. For what can their former employer get an injunction?
  3. Would your answers be the same in question 2, if were sympathetic strike, a unionizing strike, a strike for higher wages, or a strike to get an unpopular official discharged?
  4. A combination of oil refiners decides to destroy a small rival so as to get a monopoly of the trade in his district. Accordingly they announce that none of them will sell to any dealer in that district who continues to deal with the rival after their contracts run out, that they will give 25% discount to those who will break their contracts, that to those who are not under contract they will make 12½ % discount, and that they will give 120 days besides to those who have been given any credit by the rival. For what can the small refiner sue the combination?
  5. A manufacturer of matches whose trade extends all over New England sells out his business to the North American Match Company, a monopolizing corporation, to which he agrees not to engage in the match business for ten years within the New England States, not to engage in the chemical business for twenty years east of the Mississippi River, to sell to the North American Match Company at cost plus 10% a year any plants he may establish thereafter in the United States, and to induce his customers to deal with the North American Match Company henceforth. How many of these agreements can the North American Match Company enforce?
  6. The X corporation is organized with capital stock of $100,000, which is sold to its stockholders at discounts averaging 50%. It issues $100,000 debenture bonds, which are sold to the public at discounts averaging 25%. It paid one of its stockholders $100,000 for goods not worth at market quotations over $80,000, and it par one of its directors $100,000 for goods not worth more than $70,000. After a disastrous season the X company fails leaving goods worth only $20,000. How much do the debenture bondholders get?
  7. A corporation organized to run cars, buys lands for its works twice as extensive as it then needs, it buys another tract nearby on which it constructs houses for its workmen, it constructs a foundry to make its own castings, it buys an iron works at a distance to smelt its own ore, the iron works owning great tracts of ore lands. To how much of this can the Attorney-General object as ultra vires?
  8. What arguments may be made against the legality of a combination of corporations in the form of a pool, a trust, a holding corporation, and a consolidating corporation?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 8, Bound Volume: Examination Papers, Mid-Years 1908-09.

Image Source: Memorial Hall, ca. 1900. Library of Congress Prints and Photographs Division Washington, D.C. 20540.

Categories
Exam Questions Johns Hopkins Macroeconomics Undergraduate

Johns Hopkins. Undergraduate exams for national income and employment. Domar, 1955-1956

Machlup presenting, Domar, in profile, 3rd person to Machlup's right.

The undergraduate course Political Economy 3 (National Income and Employment) at Johns Hopkins was followed by Political Economy 4 (Economic Fluctuations and Fiscal Policy). Both terms of introductory macroeconomics were taught by Evsey Domar in 1955-56.  Class outline, readings, and exams for Political Economy 4 were posted earlier.

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Course Announcement
1955-56

National Income and Employment. 3.  Professor Domar. Three hours weekly, first term.

National income and its composition. The determination of income, employment, and the general price level. A brief treatment of the problem of economic stability and development.

Prerequisite: Political Economy 1.

Source: Johns Hopkins University. Undergraduate Programs, Announcements of Courses 1955-1956 in Circular 1955-1956 Vol. 74, New Series 1955, Number 8, p. 102 [In annual volume of Circulars, p. 746].

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E. D. Domar
November 2, 1955

THE JOHNS HOPKINS UNIVERSITY

NATIONAL INCOME AND EMPLOYMENT
(Political Economy 3)

[FIRST] HOUR EXAMINATION
Fall Term, 1955-56

Answer all questions in any order you like. Indicate carefully each step in your reasoning and computations.

  1. [40%] On the basis of the data given below. compute the following estimates (not necessarily in this order):
      1. Gross national product from the expenditure point of view.
      2. Gross national product from the income point of view.
      3. National income.
      4. Disposable personal income.
      5. Saving and Investment account.

Set up only such auxiliary accounts as you need to prepare these estimates. Be careful to make your results mutually consistent.

Capital consumption allowances (depreciation)

14
Compensation of employees (wages & salaries)

90
Corporate income taxes

10
Dividends (received by consumers)

8
Employer (business) contribution to social insurance

3
Government purchases of goods and services

38
Government transfer payments

6
Gross private domestic investment (capital formation)

25
Indirect business taxes

14
Income of unincorporated enterprises

20
Interest received by consumers from business

3
Interest received by consumers from government (on the public debt)

3
Net foreign investment (our investment in foreign countries)

-1
Personal consumption expenditures

110
Personal contribution to social insurance (employee payroll taxes)

2
Personal income taxes

16
Rental income of persons

5
Undistributed corporate profits

5
  1. [20%] Explain why government receipts and expenditures create special problems for national income (or gross product) estimators. How are these problems resolved?
  2. [40%] For each of the following items explain the following:
    1. Its nature;
    2. Its treatment in the computation of GROSS NATIONAL PRODUCT and of DISPOSABLE PERSONAL (CONSUMER) INCOME by the U. S. Department of Commerce;
    3. Grounds for such treatment;
    4. Your evaluation of the grounds and your own recommendations. Justify each position you take.
      1. Capital gains and losses
      2. Imputed rent
      3. Interest on the Federal debt
      4. Payments made to veterans for education
      5. Food produced in the farm and consumed by the farmer and his family.
      6. Undistributed profits
      7. Intermediate products
      8. Profits made by a monopolist
      9. Profits made by an American corporation abroad but not remitted to the U. S.
      10. Employer contribution to social insurance.

* * * * * * * * * * * * *

E. D. Domar
December 7, 1955

THE JOHNS HOPKINS UNIVERSITY

NATIONAL INCOME AND EMPLOYMENT
(Political Economy 3)

[SECOND] HOUR EXAMINATION
Fall Term, 1955-56

Answer all questions in any order you like. Indicate each step in your reasoning. No credit will be given for vague generalities.

  1. [20%] Discuss the performance of the American economy during the period 1866-1918. Try to explain the causes of the most important developments.
  2. [5%] The numbers below refer to the United States in 1954. Indicate in your blue book the one number which in each case comes closest to being true. If you fail to indicate a number you will receive zero; if you indicate an incorrect one you will receive a negative score.
(a) Gross National Product (in current prices) 360 375 390 (billions)
(b) Gross Private Domestic Investment 30 45 60 (billions)
(c) Disposable personal income 250 275 300 (billions)
(d) Personal savings as a fraction of disposable personal income 3 5 7 (per cent)
(e) Compensation of employees as a fraction of National Income 50 70 90 (per cent)
  1. [20%] “Gross National Product is an excellent index of the welfare of the people.” Comment.
  2. [25%] State and explain the main factors affecting Personal Consumption Expenditures out of a given Gross National Product.
    Explain which of them and in what manner can be affected by government policies.
  3. [20%] Whether gross national product is approached from the production, income or expenditure point of view, the totals are supposed to be identical (subject to a small statistical error). Yet in current economic discussions one often hears expressions such as “shortage of purchasing power,” “excess of purchasing power,” “insufficient investment,” “excessive government expenditures,” and so on.
    How do you reconcile this contradiction?
  4. [10%] “What is good for an individual or a firm is good for the country.” Comment.

* * * * * * * * * * * * *

E. D. Domar
January 27, 1956

THE JOHNS HOPKINS UNIVERSITY

NATIONAL INCOME AND EMPLOYMENT
(Political Economy 3)

FINAL EXAMINATION — THREE HOURS
Fall Term
1955-56

Answer all questions in any order you like. Indicate carefully each step in your reasoning.

  1. [24%] Explain CAREFULLY how each of the transactions listed below affects (if it does)
    1. GROSS NATIONAL PRODUCT,
      and one or more of its subdivisions:
    2. PERSONAL CONSUMPTION EXPENDITURES,
    3. GROSS PRIVATE DOMESTIC INVESTMENT,
    4. NET FOREIGN INVESTMENT
    5. GOVERNMENT PURCHASES OF GOODS AND SERVICES.
      1. Interest on the Federal debt received by individuals from the government.
      2. An allowance received by a college student from his parents.
      3. A fee to a music teacher paid by the student mentioned in (b).
      4. Purchases of groceries made by the wife of the music teacher mentioned in (c).
      5. Land purchased by the City of Baltimore to build a music center.
      6. Exports of used buses to South America.
      7. Personal income tax paid by the individual to the Federal government.
      8. Capital gains made by a college professor on the stock market.
      9. Tourist expenditures made abroad by the professor mentioned in (h) out of his capital gains.
      10. A loan which a Baltimore business man obtained from the local bank.
      11. A Federal bond which a student cashed at the local bank.
      12. A house which Mr. X. has just constructed for himself and his family.

In each case, follow the criteria used by the U. S. Department of Commerce, but feel perfectly free and welcome to state and justify other criteria that you would prefer to use.

DO NOT GO BEYOND THE EVENTS DESCRIBED IN EACH TRANSACTION. DO NOT TAKE INTO ACCOUNT ANY SECONDARY EFFECTS.

  1. [20%] Discuss the performance of the American economy during the period 1919-39. Present an analysis of the most important developments. Be specific.
  2. [10%] (a) Explain thoroughly and (b) evaluate critically the concept of the MULTIPLIER by indicating how it is supposed to work, on what assumptions it is based, and its usefulness (if any) in the explanation of economic fluctuations and for the formulation of economic policy.
  3. [15%] In 1946, soon after the end of World War II, Congress was considering a large loan to Britain. A question naturally arose as to why the loan should be given to Britain rather than to some other country. A front page article in the New York Times defended the loan to Britain on the ground that the British would undoubtedly spend the proceeds of the loan in the United States, while some other country might not be so accommodating.
    Comment fully on the argument advanced by the New York Times.
  4. [16%] Define briefly the following terms and explain critically their use in economic analysis. Illustrate your explanation with examples
    1. Marginal efficiency of capital (or of investment).
    2. Index numbers.
    3. Acceleration principle.
    4. Saving and Investment account.
    5. Intermediate products.
    6. Kondratieff Cycle.
    7. Secular stagnation.
    8. Imputed rent.
  5. [15%] Some time ago John M. Keynes, the famous English economist, suggested that the Government should:

“Fill old bottles with (newly printed) banknotes, bury them at suitable depth in disused coal mines which are then filled up to the surface with town rubbish, and leave it to private enterprise to dig the notes up again…”

Retaining your sense of humor and remembering that Keynes was endowed with one too, discuss thoroughly the following questions regarding this statement:

    1. What economic conditions did Keynes try to remedy by this strange method?
    2. Suppose his suggestion were accepted. Trace as completely as you can its effects on national income (or gross national product), the level of employment and the price level.
    3. Compare the effects of Keynes’ suggestion with those resulting from a discovery and mining of gold deposits (a) in the U. S. (b) in a small country like Holland.

Source: Duke University. Economists’ Papers Archives, David M. Rubenstein Rare Book & Manuscript Library. Evsey D. Domar Papers, Box 16, Folder “Misc. Examinations”.

Image Source: 1956 Johns Hopkins University yearbook Hullabaloo (p. 15).