Category: Exam Questions

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Exam Questions Harvard Undergraduate

Harvard. Undergraduate General Examination in Economics, 1956

 

 

Other undergraduate Harvard divisional/departmental  general exams that have been transcribed and posted earlier:

General Division Exam 1916

General Division Exam 1917

Division Exams 1939

Economics General Exam 1953

______________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS
GENERAL EXAMINATION — May 2, 1956
(Three hours)

Please be sure to use a separate bluebook for each Section, noting on the cover of each book the numbers of the questions discussed therein, and HONORS or NON-HONORS.

 

PART I
(One hour)
Economic Analysis

All candidates answer ONE question.

  1. It is often said that investment is one of the principal determinants of national income. On the other hand it is also claimed that national income is one of the principal determinants of investment. In what sense is each of these statements true? What are the implications of these propositions for the theory of business cycles?
  2. “Almost no one would select the industries which are distinguished by a close approach to the competitive model as a showpiece of American industrial achievement. The showpieces are, with rare exceptions, the industries which are dominated by a handful of large firms. The foreign visitor, brought to the United States by the Economic Cooperation Administration, visits the same firms as do attorneys of the Department of Justice in their search for monopoly.” Discuss.
  3. Wages and profits perform important functions in the economic system. To what extent are these functions the same and to what extent do they differ?
  4. Ricardo considered savings as the basis of economic growth. Some modern common economists on the other hand have argued that a high propensity to save reduces the rate of economic growth. Explain the reasons for each of these views.
  5. Agriculture is an excellent example of the failure of the competitive system to allocate resources efficiently. Discuss.

 

PART II
(Two hours)

Part II consists of five sections: A. Industrial Organization; B. Labor Economics; C. Economic History; D. Money, Economic Fluctuations, and International Trade; and E. Statistics. Each student must answer FOUR questions from Part II, distributed among the sections as follows:

Either

(1) TWO questions each from TWO different Sections chosen from A, B, C, D.

Or

(2) ONE question from Section E; and three other questions, TWO chosen from any ONE of A, B, C, D, and ONE from ANOTHER of these Sections.

A. Industrial Organization

  1. “The diversity of behavior revealed by a study of particular oligopolies in the United States helps explain why economists have been unable to produce a unique theory of oligopoly.” Discuss.
  2. Evaluate the evidence for and against the thesis that monopoly has increased during the last half-century in American manufacturing industries.
  3. With respect to either electric power or railroads, what do you think have been the chief achievements and shortcomings of the regulatory process in the United States?
  4. Discuss the problem of resale price maintenance laws, commenting on
    1. The historical circumstances from which resale price maintenance agreements evolved;
    2. The characteristics of goods most commonly sold under resale price maintenance agreements and why the producers of these goods prefer to operate under such agreements;
    3. The economic effects of resale price maintenance.

 

B. Labor Economics

  1. The following are recently released figures by the Bureau of Labor Statistics showing production, man hours, and output per man hour in the bituminous coal industry since 1935. Selected years are shown as follows; 1947-49 is the base in each case.
Year Production Man hours Output per man hour
1935 67.0 89.0 75.3
1938 62.7 73.8 85.0
1941 92.5 100.5 92.0
1945 103.9 111.5 93.2
1948 107.8 109.0 98.9
1950 92.9 82.1 113.2
1954 70.4 47.3 148.8

(a) What factors would you advance to explain the movement in output per man hour? (b) Is the 100 percent rise in output per man hour in this twenty year period a consequence of, or a reason for, substantial wage rate increases?

  1. How do you praise be consequences of the merger between the AFL and CIO? Indicate the consequences for organizing campaigns and union growth, internal union government, legislative and political action, collective bargaining, and the movement of wages. Consider the consequences both within the labor movement and for the economy generally.
  2. “The growing importance collective-bargaining cannot be reconciled with the view that unions may be considered as private organizations or ‘clubs’.” Discuss. What types of public policy would you advocate with respect to governmental intervention in the internal affairs of unions?
  3. Explain the meaning of “marginal productivity” to a friend who is never studied economics. Explain further whatever degree of relation you believe exists between marginal productivity and wages.

 

C. Economic History

  1. It has been said that “mercantilism” has always been the dominant economic philosophy in American politics. Discuss.
  2. How does the development of the corporation as an institutional form for organizing business activity different in United States and Great Britain? What accounts for and what have been the consequences of these developments?
  3. Contrast ante- and post-bellum Southern Agriculture.
  4. What light does [sic] the depression experiences of 1873, 1920, 1929, cast on business cycle theories and policies?

 

D. Money, Economic Fluctuations, and International Trade

  1. What actions could the Federal Reserve authorities take to check an inflationary movement? What objections might be raised against the use of any combination of these actions?
  2. Suppose the trade unions force up money wages. Discuss the effect of the change on employment and prices in terms of (a) the Quantity Theory of Prices (b) the Keynesian theory of the price level.
  3. Supposed that aggregate income were to remain constant for the next six months while unemployment slowly rose. What budgetary and monetary policies would you recommend?
  4. In a recent statement to the Associated Press, Mr. T. Coleman Andrews, Commissioner of Internal Revenue for the first three years of the present administration until his resignation last Spring, declared his complete opposition to the taxation of personal income. He advocated completely doing away with the individual income tax and substituting “less burdensome” taxes.
    1. What reforms, if any, would you advocate in the taxation of individual income? Explain.
    2. Are there any “less burdensome” taxes than the individual income tax? Explain.
      Note: throughout your discussion keep in mind the fiscal policy aspects of taxation as well as considerations of the effects on incentives, equity, etc.
  5. With few exceptions output per worker is much higher in American industries (including agriculture) than in other countries. How is it possible under these circumstances to maintain equilibrium between exports and imports?

 

E. Statistics

  1. Summarize and discuss critically two quantitative studies dealing with one or more phases of household behavior.
  2. Discuss the relative advantages and disadvantages aggregative time series data, cross sectional data, and re-interview data on identical households for purposes of estimation and testing of hypotheses.
  3. Discuss various ways in which statistics may be of use in economic research. In formulating your answer give consideration to some or all of the following: formation of hypotheses, testing of hypotheses, estimation of population parameters, and design of experiments.

 

Source:  John F. Kennedy Presidential Library. John Kenneth Galbraith Personal Papers, Harvard University File, 1949-1965, Box 528, Folder “Tutorial 9/15/51-9/57”.

Image Source: Duster House Tower, Harvard College. Library of Congress, Prints and Photographs Division.

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Exam Questions Johns Hopkins

Johns Hopkins. General exam questions for economics Ph.D., 1954

 

It is pretty interesting to compare the Harvard micro and macro general exams 1992 with what was asked economics graduate students at Johns Hopkins in 1954, transcribed and posted below. I note that the index number question (the first question in Part IV) was more-or-less covered in my second lecture of undergraduate principles of macroeconomics a few days ago (OK, I grant it was somewhat heavy-going, but somebody’s gotta do it…and better earlier than never). 

Ten comprehensive Ph.D. exams from Johns Hopkins in 1965 were transcribed and posted earlier.

_______________________

GENERAL WRITTEN EXAMINATIONS FOR THE PH.D.
Department of Political Economy
May 25-26, 1954

Part I — Three hours
May 25, 1954 — 9 a.m.

Answer the following questions: I and II; III or IV; they carry equal weights.

I.

In four out of five given cases, explain exactly — with or without the aid of graphs — how you can derive

  1. a demand curve for a commodity (as a function of price) from a family of indifference curves between that commodity and money;
  2. a supply curve for a foreign currency (as a function of its exchange rate in terms of domestic currency) from a demand curve for domestic currency (as a function of its exchange rate in terms of the foreign currency);
  3. a savings curve (as a function of income) from a consumption curve (as a function of income);
  4. a demand (liquidity preference) curve for cash balances (as a function of the interest rate) from a supply curve of interest-bearing securities (as a function of security prices);
  5. a family of interest-income curves (functions giving the equilibrium combinations of interest rate and income level) with various fixed money stocks as parameters, from a family of liquidity preference curves (as functions of the interest rate) with various fixed income levels as parameters.

II.

In three out of the five given cases, demonstrate as convincingly as you can

  1. that an increase in wage rates
    1. will result in an increase in total profits,
    2. will result in a decrease in total profits;
  2. that an increase in interest rates
    1. will result in an increase in total consumption
    2. will result in a decrease in total consumption;
  3. that an increase in government expenditures for domestic public works
    1. will result in an increase in total employment,
    2. will result in a decrease in total employment;
  4. that an increase in income taxes with an equal and simultaneous decrease in excise taxes
    1. will result in an increase in general prices,
    2. will result in a decrease in general prices;
  5. that an increase in private foreign investment
    1. will result in an increase in domestic total income,
    2. will result in a decrease in domestic total income;

[Note: In order to be convincing on both sides of each issue, you will have to change your evaluations of the probabilities with which the essential conditions responsible for the particular result may be expected actually to prevail.]

III.

“The elasticity of supply of foreign exchange will be higher, the higher is the elasticity of supply of exportable articles.” What is wrong with this statement? Why? How would you formulate the correct relationship between the variables in question?

IV.

“The question of whether capital movements lead the trade balances, or trade balances direct the capital movements has been answered differently by classical and Keynesian theory.”

Present the two views and then explain how the contradictions can be resolved, and both views found to be correct, if the terms are appropriately defined.

 

Part II — Three hours
May 25, 1954 — 2 p.m.

Answer three questions of the following five, provided you don’t select more than two from the first three. They all carry equal weights.

I.

Discuss the Neo-Classical School of Economists.

II.

In Schumpeter’s Book on the History of Economic Analysis, there is a section on “The Men Who Wrote above Their Time”. What would you write for such a section?

III.

Discuss the development of American economic thought.

IV.

Select a “period” of American economic history other than the most recent one and discuss it. Link it with the preceding and succeeding periods.

V.

Discuss England’s chief economic problems of 1793-1815.

 

Part III — Three hours
May 26, 1954 — 9 a.m.

Answer the following questions: I; any two out of the remaining three. They all carry equal weights.

I.

Write a coherent essay on statistical inference, in which you discuss (not necessarily in this order):

  1. tests of hypotheses
  2. confidence intervals
  3. errors of the first and second kind [Penciled here as change or alternative “Efficiency/Max Likelihood”]
  4. correlation and regression
  5. the identification problem
  6. the “t” distribution and an example of its use
  7. one other distribution (other than the normal) and an example of its use.

II.

It has been maintained by some that an increase in wages leads to an increase in labor supply out of a given population, and a decrease in wages to a decrease in supply; but it has also been maintained, by others, that an increase in wages brings a decrease in supply, and a decrease in wages an increase in supply.

Select one of the two views and summarize the points which have offered in defense of it. Do you think an equally strong case should be made for the other view? If you do, then are we left without a theory?

III.

Considerable attention has been devoted to the question of the effect of union activity on the wage level. One conclusion reached by several writers on the basis of statistical data is that union wage activity has resulted in no appreciable differential in favor of union income, compared to non-union income and to non-labor income.

What could be the theoretical foundations for such a result?

IV.

“Of all the single statements that can be made about wages, the statement that ‘wages tend to measure the marginal productivity of labor’ is at once the most illuminating analytically and the most important practically for the consideration of wage policy.”

This proposition has come in for considerable criticism over the years. What are the most telling points of this criticism?

 

Part IV — Three hours
May 26, 1954 — 2 p.m.

I.

Write an essay on index numbers in economics, in which you discuss (not necessarily in this order)

  1. price indexes
  2. quantity indexes
  3. value indexes
  4. constant-weight (Laspeyres) indexes
  5. changing-weight (Paasche) indexes
  6. the relationships among price, quantity, and value indexes
  7. the use and limitations of economic index numbers

II.

Evaluate critically the contribution which Keynes’ General Theory has made to:

  1. Theoretical economic thinking
  2. Economic policy

III.

Present and analyze some (reasonably respectable) business cycle theory.

IV.

Compare and contrast monetary and fiscal policies as methods of achieving economic stabilization (reasonably full employment without inflation). Include (but don’t limit yourself to) the following points:

  1. The theoretical foundation of each
  2. Methods used
  3. Effects on distribution of income and wealth
  4. Social and political repercussions
  5. Their effectiveness and limitations.

Do they overlap? Can you work out a synthesis of both?

 

Source: Johns Hopkins University. Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy Series 5/6.  Box No. 6/1. Folder: “Comprehensive Exams for Ph.D. in Political Economy, 1947-1965”.

Image Source: from the cover of the 1954 Johns Hopkins yearbook, Hullabaloo.

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Exam Questions Harvard History of Economics

Harvard. Final exams for “Modern Economic Theory and its Critics”. O.H. Taylor, 1938-39.

 

Just started a “scope and methods of economics” course this semester and after consulting my files from archival visits to Harvard, I discovered that good old Overton Hume Taylor offered a similar course there fifteen times during the 1930s and 1940s. I have already transcribed/posted numerous syllabi and exams for his other courses in the history of economics, political economy, and socialism. For some unknown reason he apparently did not keep a syllabus of assigned readings on file for his “Modern Economic Theory and its Critics” course with the Harvard library. For now we’ll be limited to the printed semester final examinations that I have located in the Harvard archives to reverse-engineer his likely reading assignments.

The stability of the course content may be presumed from the identical course descriptions (with the sole exception of “programmes” becoming “programs”) in the 1932-33 and 1940-41 Division announcements, included below.

Overton Hume Taylor received his economics Ph.D. from Harvard in 1928 with the dissertation “The Idea of a Natural Order in Early Modern Economic Thought.” 

 

Chronology of O. H. Taylor’s course Economics 105
(formerly Economics 17)

1930-31. Ec17 Half-course (second half-year). Classical Economics and Eighteenth Century Philosophy. 3 students enrolled (1 Gr., 1 Sr., 1 Jr.)

1931-32. Ec17 Half-course (second half-year). Classical Economics and Eighteenth Century Philosophy.

1932-33. Ec17 Half-course (second half-year). Modern Economic Theory and its Critics.

1933-34. Ec17 Full-course. Modern Economic Theory and its Critics.

1934-35. Ec17 Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.”

1935-36. Ec17 Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.”

1936-37. Ec105 (formerly 17) Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.”

1937-38. Ec105 (formerly 17) Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.”

1938-39. Ec105 Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.” [Note: James Tobin took the second semester of the course. His student notes are found with his papers at the Yale University archives].

1939-40. Ec105 Modern Economic Theory and its Critics. “This course may be taken as a half-course in either half-year.”

1940-41. Ec105 Half-course (first half-year). Modern Economic Theory and its Critics.

1941-42. Ec105 Half-course (first half-year). Modern Economic Theory and its Critics.

1942-43. Ec105 Half-course (first half-year). Modern Economic Theory and its Critics.

1943-44. Ec105a. Half-course (first half-year).  Modern Economic Theory and its Critics. 12 students enrolled (9 Graduates, 3 Public Admin.)

1944-45. Ec105a. Half-course (first half-year).  Modern Economic Theory and its Critics. 3 students enrolled (1 Graduate,1 Public Admin., 1 Radcliffe)

1945-46. Ec105a Half-course (first half-year). Modern Economic Theory and its Critics. 2 students enrolled (2 Graduate)

1946-47. Ec105a. Half-course (first half-year). 3 students enrolled (1 Graduate, 2 Radcliffe)

_______________________

Course Description, 1932-33

[Economics] 17 2hf. Modern Economic Theory and its Critics

Half-course (second half-year). Mon., Wed., Fri., at 12. Dr. Taylor.

A critical study of conflicting views in regard to the proper aim and scope, method, and basic “premises” of economic theory. The views considered are those reflected, in recent English and American literature, in the work of relatively “orthodox” theorists on the one hand, and in the criticisms, programmes, and attempted innovations of various “insurgent” writers on the other hand. Reading, lectures, and discussions.

 

Source: Division of History, Government, and Economics 1932-33. Official Register of Harvard University, Vol. XXIX, No. 32 (June 27, 1932), p. 77.

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Course Description, 1940-41

[Economics] 105a 1hf. Modern Economic Theory and its Critics

Half-course (first half-year). Tu., Th., Sat., at 12. Dr. O. H. Taylor.

A critical study of conflicting views in regard to the proper aim and scope, method, and basic “premises” of economic theory. The views considered are those reflected, in recent English and American literature, in the work of relatively “orthodox” theorists on the one hand, and in the criticisms, programs, and attempted innovations of various “insurgent” writers on the other hand. Reading, lectures, and discussions.

 

Source: Division of History, Government, and Economics 1940-41. Official Register of Harvard University, Vol. XXXVII, No. 51 (August 15, 1940), pp. 58-59.

_______________________

Course Enrollment, 1938-39

[Economics] 105. Dr. O. H. Taylor.—Modern Economic Theory and its Critics.

Total 13: 6 Graduates, 5 Seniors, 2 School of Public Administration

Source: Harvard University. Report of the President of Harvard College, 1938-1939, p. 99.

_______________________

Reading Period Assignments, 1938-39

Mid-year: January 5-18, 1939

Economics 105: Read one of the following:

  1. Jevons, W. S., Theory of Political Economy.
  2. Von Wieser, F., Natural Value.
  3. Wicksteed, P. Common Sense of Political Economy. Vol. I.

 

End-year: May 8-31, 1939

Economics 105: Read one of the following:

T. Veblen, Instinct of Workmanship.
T. Veblen, Theory of Business Enterprise.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 2, Folder “Economics, 1938-1939”.

_______________________

1938-39
HARVARD UNIVERSITY
ECONOMICS 105
Final Examination, mid-year. 1939.

Answer one of the first three questions — four questions in all. Average time, 45 minutes per question — distribute your time at your own discretion.

  1. Write your own accounts, and critical discussions, of (a) realism and nominalism, (b) rationalism and empiricism, and (c) the ‘methods’ of the ‘classical’ and ‘historical schools’ in economics.
  2. Discuss the general ideas prevalent in the eighteenth century about (a) causal and (b) ethical “natural laws” pertaining to human activities and social life; and the contributions of these ideas to the outlook and beliefs of nineteenth century “orthodox” economists and economic liberals.”
  3. Write a summary and criticism of the main ideas or theses included in Bentham’s “utilitarianism”; and a discussion of the question whether, and how far, the same, or similar, ideas became “the basis” of economic theory, in the hands of Ricardo and of later writers.
  4. Explain the substance, and discuss the merits, of Ricardo’s arguments and “doctrines” about either(1)(a) labor and value, and (b) rent and value; or (2)(a) wages in the short run and in the long run and(b) profits.
  5. Discuss either (a) “romanticism,” and the views of Carlyle or of Ruskin about classical economics; or (b) “positivism,” and the views of Comte.
  6. Explain and discuss the main ideas and reasonings you’ve found in Jevons, von Wieser, or Wicksteed, on the topics of utility, cost, and value.

 

Source: Harvard University Archives. Harvard University Mid-Year Examinations, 1852-1943. Box 13, Papers Printed for Mid-Year Examinations. History, History of Religions, …, Economics, …, Military Science, Naval Science. January-February, 1939.

_______________________

1938-39
HARVARD UNIVERSITY
ECONOMICS 105
Final Examination, year-end. 1939.

Write on SIX questions; omit either (3) or (4), and either (6) or (8).

  1. Describe and discuss, with reference to Marshall’s Principles, either (a) his ‘sociological’ and ‘economic’ ideas, his theory about ‘wants’ and ‘activities,’ his views about ‘free enterprise,’ his view on the direction of ‘social evolution,’ and his attitude to ‘hedonism’ and the ‘money measure’; or (b) his theories of diminishing and increasing returns, and of ‘lengths of time’ and ‘normal value.’
  2. Describe and discuss Veblen’s idea of the nature of ‘modern science’; his account and criticism of the preconceptions of classical economics; his view of what economic science should be and do; his general theory of the evolution of institutions; and his theory of the conflict of the ‘industrial’ and ‘pecuniary’ classes in modern society. Add your own appraisal of Veblen as ‘scientist,’ and your list of what seems to you his most valuable contributions to economics.
  3. Describe and discuss Mitchell’s account and criticism of the psychological basis of classical theory, and his proposals for a new approach through modern psychologies; and explain your own views on this problem.
  4. Do you think that economic theory should, in reference to social institutions, (a) only postulate various institutional set-ups as ‘given’ and study the solutions of ‘economic’ problems attainable under them, or (b) include the development of institutions in its own subject-matter, i.e. study the interactions of ‘economic’ and ‘institutional’ change? Take one position or the other, and develop your arguments for the position you take.
  5. How does Chamberlin describe and explain the main economic consequences for society of product-differentiation and oligopoly, as compared with those of pure competition? Discuss the assumptions involved in, and the significance of, this comparison. Do you think it has any implications for public policy?
  6. Describe and discuss the main features of Schumpeter’s theory of capitalist ‘development’ – his theories of the nature and rôle of entrepreneurial activity, of credit, of capital, of profits, and of the business cycle.
  7. Write anything you wish to write, on the reading you did under the May reading assignment.
  8. Write a half-hour essay on any topic of your own choice, in any way related to any of the subject-matter of the course not treated in your answers to the foregoing questions.

 

Source: Harvard University Archives. Harvard University Final Examinations, 1853-2001. Box 4, Papers Printed for Final Examinations. History, History of Religions, …, Economics, …, Military Science, Naval Science. June 1939.

Image Source: Harvard Class Album 1942.

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Exam Questions Harvard

Harvard. Exam questions for “The Labor Question in Europe and the U.S.” Edward Cummings, 1894

 

Edward Cummings, the father of the poet E. E. Cummings, covered the social economics course offerings at Harvard at the end of the 19th century. These included courses in labor economics and social reform movements (esp. “socialism and communism”). The exams for his comparative labor course from 1893-94 mostly consisted of specific unidentified quotations, with students asked to provide explanations or comments. The text-search functions at hathitrust.org, archive.org and google located a dozen of the quotations used by Cummings and links to the texts have been provided below.

___________________________

Course Description
(from 1896-97)

The Labor Question in Europe and the United States. — The Social and Economic Condition of Workingmen. Tu., Th., Sat., at 10. Asst. Professor Edward Cummings and Dr. John Cummings.    (VIII)

Course 9 is a comparative study of the condition and environments of workingmen in the United States and European countries. It is chiefly concerned with problems growing out of the relations of labor and capital. There is careful study of the voluntarily organizations of labor, — trade unions, friendly societies, and the various forms of cooperation; of profit-sharing, sliding scales, and joint standing committees for the settlement of disputes ; of factory legislation, employers’ liability, the legal status of laborers and labor organizations, state courts of arbitration, and compulsory government insurance against the exigencies of sickness, accident, and old age. All these expedients, together with the phenomena of international migration, the questions of a shorter working day and convict labor, are discussed in the light of experience and of economic theory, with a view to determining the merits, defects, and possibilities of existing movements.

The descriptive and theoretical aspects of the course are supplemented by statistical evidence in regard to wages, prices, standards of living, and the social condition of labor in different countries.

Topics will be assigned for special investigation, and students will be expected to participate in the discussion of selections from authors recommended for a systematic course of reading.

The course is open not only for students who have taken Course 1, but to Juniors and Seniors of good rank who are taking Course 1.

 

Source: Harvard University, Faculty of Arts and Sciences. Division of History and Political Science Comprising the Departments of History and Government and Economics, 1897-98, pp. 36-37.

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Course Enrollment
1893-94

[Economics] 9. Asst. Professor Cummings. — The Social and Economic Condition of Workingmen in the United States and in other countries. 3 hours.

Total 43: 7 Graduates, 16 Seniors, 11 Juniors, 3 Sophomores, 1 Freshman, 5 Other.

Source: Harvard University. Annual Report of the President of Harvard College, 1893-94, p. 61.

___________________________

Mid-year Examination
ECONOMICS 9
1893-94.

(Arrange your answers in the order in which the questions stand. So far as possible illustrate your discussions by a comparison of the experience of different countries. Omit two questions.)

  1. “It becomes my duty, therefore, in undertaking to interpret the social movement of our own times, to disclose, first, those changes in industrial methods by which harmony in industries has been disturbed, and then to trace the influence of such changes into the structure of society.” State carefully what these changes have been; and trace their influence.
    [Henry C. Adams. “An Interpretation of the Social Movements of our Time”, International Journal of Ethics, Vol II, October, 1891), p. 33]
  2. Discuss the effect upon wages of machinery, — (a) as a substitute for labor (b) as auxiliary to labor; (c) as affecting division of labor; (d) as concentrating labor and capital; (e) as affecting the nobility[sic, “mobility”] of labor and capital.
  3. “In my opinion, combination among workingmen is a necessary step in the re-crystallization of industrial rights and duties.” State fully your reasons for agreeing or disagreeing with this opinion. What forms of combination do you include?
    [Henry C. Adams. “An Interpretation of the Social Movements of our Time”, International Journal of Ethics, Vol II, October, 1891), p. 45]
  4. “Trade-unions have been stronger in England than on the Continent, and in America….” In what respects stronger? Why? Contrast briefly the history and present tendencies of the trade-union movement in the United States, England, France, Germany, and Italy.
    [Alfred Marshall, Elements of Economics of Industry: being the First Volume of Elements of Economics (London: Macmillan, 1892), Book VI, Ch. XIII. §18, p. 404]
  5. “Trade-unions have been stronger in England than on the Continent, and in America; and wages have been higher in England than on the Continent, but lower than in America.” “Again, those occupations in which wages have risen most in England happen to be those in which there are no unions.” How far do such facts impeach the effectiveness of trade-unions as a means of raising wages and improving the condition of workingmen? What do you conceive to be the economic limits and the proper sphere of trade-union action?
    [Alfred Marshall, Elements of Economics of Industry: being the First Volume of Elements of Economics (London: Macmillan, 1892), Book VI, Ch. §18, pp. 404-405.]
  6. “We saw at the beginning that in comparatively recent years the difficulties of keeping up a purely offensive and defensive organization had brought many of the unions back nearer their old allies, the friendly societies, and emphasized the friendly benefits in proportion as the expenditure for trade disputes seemed less important.” Explain carefully this earlier and later relation of trade-unions and Friendly Societies in England.
    [Edward Cummings, The English Trades-Unions, Quarterly Journal of Economics, Vol. III (July, 1889), p. 432.]
  7. “This spirit of independent self-help has its advantages and its disadvantages. We have already had occasion to remark how slow in these Friendly Societies has been the progress of reform, and we must repeat that up to the present day it still exhibits defects.” Explain and illustrate the progress of the reform and the nature of existing defects. Does English self-help experience suggest the desirability or undesirability of imitating German methods of compulsory insurance?
  8. “Countless[sic, “Doubtless” in original] boards of arbitration and conciliation, the establishment of certain rules of procedure, agreements covering definite periods of time, may aid somewhat in averting causes of dispute or in adjusting disputes as they arise; but if we have these alone to look to, strife will be the rule rather than the exception.” Explain the various methods adopted and the results obtained. What have you to say of “compulsory arbitration?”
    [Francis A. Walker. “What Shall We Tell the Working Classes?” Scribner’s Magazine, Vol. 2, 1887.  Reprinted in Discussions in Economics and Statistics, edited by Davis R. Dewey. Vol. II. 315-316.]
  9. “The conclusion of the whole matter seems to be, that what is desirable is not so much to put a stop to sub-contracting as to put a stop to ‘sweating,’ whether the man who treats the workman in the oppressive manner which the word ‘sweating’ denotes be a sub-contractor, a piece-master, or a contractor.” Indicate briefly some of the principal forms of industrial remuneration, — giving the special merits and defects of each.
    [David F. Schloss. Methods of Industrial Remuneration (London: Williams and Norgate, 1892), p. 140.]
  10. “Now that I am on piece-work, I am making about double what I used to make when on day-work. I know I am doing wrong. I am taking away the work of another man.” State and criticize the theory involved in this view of production.
    [David F. Schloss. Methods of Industrial Remuneration (London: Williams and Norgate, 1892), p. 43-44.]

 

Source: Harvard University Archives. Harvard University, Mid-year examinations, 1852-1943. Box 3, Volume: Examination Papers, Mid-Year, 1893-94.

___________________________

Year-End Examination
ECONOMICS 9.
1893-94.

(Arrange your answers in the order in which the questions stand. So far as possible illustrate your discussions by a comparison of the experience of different countries. Take the first three questions and four others.)

  1. “As soon, however, as the factory system was established, the inequality of women and children in their struggle with employers attracted the attention of even the most careless observers; and, attention once drawn to this circumstance, it was not long before the inequality of adult men was also brought into prominence.” How far is this true (a) of England, (b) of the United States? Trace briefly the legislative consequences for children and for adults in the two countries.
    [Arnold Toynbee. Lectures on the Industrial Revolution of the 18th Century in England (The Humboldt Library of Popular Science Literature, Vol. 13. New York: Humboldt Publishing Co.), p. 17.]
  2. “It will be necessary, in the first place, to distinguish clearly between the failure of Industrial Coöperation and the failure of the coöperative method—a method, as we have seen, adopted, even partially, by only a very small fraction of Industrial Coöperation.” Explain carefully, discussing especially the evidence furnished by France and England.
  3. “These four concerns—the Maison Leclaire, the Godin Foundry, the Coöperative Paper Works of Angoulême and the Bon Marché—are virtually coöperative; certainly they secure to the employers and stockholders the substantial benefits of purely coöperative productive enterprises, while they are still, logically, profit-sharing establishments.” State your reasons for agreeing or disagreeing. Indicate briefly the characteristic features of each enterprise.
  4. “What inferences are we to draw from the foregoing statistics? Unmistakably this, that the higher daily wages in America do not mean a correspondingly enhanced labor cost to the manufacturer. But why so?” Discuss the character of available evidence in regard to the United States, Great Britain and the continent of Europe.
    [E. R. L. Gould. The Social Condition of Labor (Baltimore: Johns Hopkins Press, January 1893), pp. 41-2.]
  5. “The juxtaposition of figures portraying the social-economic status of workmen of different nationalities in the country of their birth and the land of their adoption furnishes lessons of even higher interest. From this we are able to learn the social effect of economic betterment.” Explain. How do the facts in question affect your attitude toward recent changes in the character and volume of our immigration?
    [E. R. L. Gould. The Social Condition of Labor (Baltimore: Johns Hopkins Press, January 1893), pp. 35-6.]
  6. “The Senate Finance Committee issued some time ago a comparative exhibit of prices and wages for fifty-two years, from which the conclusion is generally drawn that the condition of the wage earner is better to-day than it was thirty or forty years ago. A conclusion of this kind reveals the weakness of even the best statistics. No one can doubt that the work of the Finance Committee is work of high excellence, but for comparing the economic condition of workers it is of little value.” Do you agree or disagree? Why? Indicate briefly the character of the evidence.
  7. What are the principle organizations which may be said to represent the “Labor Movement” in the United States at the present time? How far are they helpful and how far hostile to one another?
  8. “In a preceding chapter I have said that as a moral force and as a system the factory system of industry is superior to the domestic system, which it supplanted.” State your reasons for agreeing or disagreeing.
    [Carroll D. Wright. Factory Legislation from Vol. II, Tenth Census of the United States, reprinted in First Annual Report of the Factory Inspectors of the State of New York (Albany, 1887), p. 41.]
  9. Contrast the English and the German policy in regard to Government Workingmen’s Insurance.
  10. “Gladly turning to more constructive work, I next consider some industrial changes and reforms which would tend to correct the present bias towards individualism.” What are they?
  11. Give an imaginary family budget for American, English and German operatives in one of the following industries, — coal, iron, steel, cotton, wool, glass, indicating roughly characteristic differences in such items as throw most light on the social condition of labor.

 

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 4, Volume: Examination Papers, 1893-95.pp. 39-41.

Image Source: University and their Sons. History, Influence and Characteristics of American Universities with Biographical Sketches and Portraits of Alumni and Recipients of Honorary Degrees. Editor-in-chief, General Joshua L. Chamberlain, LL.D. Vol II (1899), pp. 155-156.

 

Categories
Exam Questions Harvard Suggested Reading Syllabus

Harvard. Readings, midterm and final exams for economic growth course. Kuznets, 1960-61

 

Simon Kuznets (b. 1901; d. 1985) left Johns Hopkins University to join the Harvard economics faculty beginning with the 1960-61 academic year. This post provides the reading list and exams for Kuznets’ signature course on economic growth from his first year as a Harvard professor. 

_________________________

Course Enrollment

[Economics] 203 Economic Growth and Comparative Economic Structures. Professor Kuznets. Full course.

(F) Total 23: 12 Graduates, 1 Senior, 1 Junior, 2 Radcliffe, 7 Other Graduate.

(S) Total 22: 12 Graduates, 1 Senior, 1 Junior, 2 Radcliffe, 6 Other Graduates.

Source: Harvard University. Report of the President of Harvard College, 1960-1961, p. 77.

_________________________

HARVARD UNIVERSITY
Department of Economics
Economics 203

Long Term Changes and International Differences—National Income and its Components

GENERAL

  1. Simon Kuznets, “National Income and Industrial Structure,” in Economic Change, Chapter 6, 145-192.
  2. Simon Kuznets, “International Differences in Income Levels,” ibid., pp. 216-252.
  3. Colin Clark, Conditions of Economic Progress, 3rd Edition 1957 or any of the earlier editions (for browsing).
  4. M. Gilbert and I.B. Kravis, An International Comparison of National Products and the Purchasing Power of Currencies, Paris, O.E.E.C., 1954.
    or (Comparative National Products and Price Levels, 1958)

RATES OF GROWTH

  1. Simon Kuznets, Economic Development and Cultural Change, Vol. V, no. 1, October 1956.
  2. Simon Kuznets, Six Lectures on Economic Growth, Free Press, 1959, pp. 13-41.

INDUSTRIAL STRUCTURE

  1. A.G.B. Fisher, The Class of Progress and Security, London 1935.
  2. E.M. Ojala, Agriculture and Economic Progress, Oxford University Press, 1952.
  3. T.W. Schultz, The Economic Organization of Agriculture, N.Y. 1953, part I.
  4. Hollis B. Chenery, “Patterns of Industrial Growth,” American Economic Review, September 1960, pp. 624-654.
  5. P.T. Bauer and B.S. Yamey, Economic Journal, December 1951, pp. 741-755.
  6. Simon Kuznets, Economic Development and Cultural Change, (a) Supplement to No. 4, Vol. V, July 1957; (b) Part 2, Vol. VI, July 1958, also Six Lectures on Economic Growth, pp. 43-67.

FACTOR SHARES

  1. R. M. Solow, “The Constancy of Relative Shares,” American Economic Review, September 1952, pp. 618-30.
  2. I. B. Kravis, “Relative Income Shares in Fact and Theory,” American Economic Review, December 1959, pp. 917-947.
  3. Simon Kuznets, Economic Development and Cultural Change, Vol. III, No. 3, Part 2, April 1959.

CAPITAL FORMATION

  1. M. Abramovitz, ed., Capital Formation and Economic Growth, Princeton 1955. Papers by Kuznets, Goldsmith, Usher, MacLaurin, and Rostow.
  2. Simon Kuznets, Economic Development and Cultural Change,
    (a) Vol. VIII, no. 4, Part II, July 1960.
    (b) Vol. IX, no. 3, Part II, April 1961

CONSUMPTION PATTERNS

  1. M. K. Bennett, “International Disparities in Consumption Levels,” American Economic Review, September 1951, pp. 632-649.
  2. Simon Kuznets, Regional Economic Trends and Levels of Living,” in P.M. Hauser, Population and World Politics, Free Press 1958.
  3. International Association for Research in Income and Wealth, Income and Wealth Series II, Chapter VI, particularly pp. 167-177. (1953)

INCOME DISTRIBUTION BY SIZE

  1. I. B. Kravis, “International Differences in the Distribution of Income,” The Review of Economics and Statistics, November 1960, pp. 402-416.
  2. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review, March 1955, pp. 1-28.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 8, Folder “Economics, 1960-1961 (2 of 2)”.

_________________________

HARVARD UNIVERSITY
Department of Economics

Economics 203
Midyear Examination
January 1961

Choose 6 out of the 8 questions, omitting one out of group 2-5 and one out of group 6-8.

Please write clearly and concisely. An outline of the answer rather than a full presentation is also acceptable, provided the outline is sufficiently detailed and informative.

  1. Outline the time pattern of rates of natural increase of population in the transition from the pre-modern period to modern growth, distinguishing movements of birth rates and death rates, separately for the older (European) and younger (overseas) countries. Comment briefly on probable causes.
  2. State the connection between Malthus’ population theory, the theory of differential rent, the law of diminishing returns, the iron law of wages, and the theory of long-term trends in distribution of national product and of the approach to the stationary state.
  3. Outline the types of evidence claimed in support of Pearl’s “law of population growth” and comment on their validity.
  4. What is the general structure of assumptions underlying an empirical projection of population growth? Distinguish the theory of the model from the theory of deviations and comment briefly on each.
  5. Indicate the reasons adduced by Alvin Hansen to demonstrate the depressive effects on economic growth of retardation in the growth of population, and evaluate them.
  6. Outline the major features of trans-ocean trade in the centuries immediately prior to the industrial revolution, and the various contributions made by it to the emergence of modern capitalism.
  7. Why was the industrial revolution concentrated primarily in cotton, iron, steel, and steam power?
  8. Discuss the slackening in the rate of technical change in the cotton textile industry after the mid-nineteenth century, as well as in the economic effects of technical change in the industry. Indicate both the ways of measuring the changes, and the reasons for slackening in the rate of their occurrence.

Source: Harvard University Archives. Social Sciences, Final Examinations. Vol. 131. January 1961. Papers Printed for Final Examinations. History, History of Religions, …, Economics, …, Naval Science, Air Science. January 1961.

_________________________

HARVARD UNIVERSITY
Department of Economics

Economics 203
Final Examination
June 6, 1961

Answer at least 4 questions, choosing at least one from each of the four Roman numeral groups. You may answer more if you wish. A detailed outline of an answer, instead of a complete text, is acceptable.

Group I

  1. In what sense is the association between technical changes and scientific discoveries, illustrated by the history of the radio industry, different from that characterizing the inventions of the Industrial Revolution? Discuss.
  2. Outline (and discuss) factors making for a retardation in the rate of growth, observable in most specific industries in the Western European countries and in the United States.

Group II

  1. Indicate properties of national income or product estimates as measures of economic growth. Consider particularly limitations arising out of difficulties as to scope, netness, and valuation.
  2. What are the implications of the rates of growth in per capita product, observed for the past half century or longer for the developed countries, as to the comparative levels of per capita product in underdeveloped countries today and in the presently developed countries just prior to their industrialization? Discuss.

Group III

  1. Discuss the factors involved in the long-term decline, in the process of modern economic growth, in the share of agriculture in national product? In labor force? Distinguish clearly between the trends in the share in product and in the share in labor force.
  2. How do you explain the rise in the shares of labor force attached to the service industries in the course of economic growth? Define the service industries before answering the question.

Group IV

  1. Define various types of proportion of capital formation to aggregate product (gross-net, domestic-national, etc.) that can be calculated; the corresponding types of capital-output ratios; and discuss their possible use in the analysis of economic growth.
  2. Discuss factors that might have made for a rising trend in the proportion of capital formation to national product observed in many (if not all) countries. Distinguish between gross and net capital formation proportions; and between domestic and national.

Source: Harvard University Archives. Social Sciences, Final Examinations. Vol. 134. June 1961. Papers Printed for Final Examinations. History, History of Religions, …, Economics, …, Naval Science, Air Science. June 1961.

Image Source: National Academy of Sciences. 2001. Biographical Memoirs: Volume 79. Washington, DC: The National Academies Press, p. 202.

Categories
Chicago Exam Questions Fields History of Economics

Chicago. History of Economic Thought, Ph.D. preliminary exam. Summer, 1989

 

The previous post provided the transcribed questions for the 1974 version of the Chicago prelim exam for the history of economic thought. Here we have the questions for a fifteen year younger exam Presumably both these sibling exams were authored by George Stigler in whose archived papers they can be found.

______________________

History of Economic Thought Prelim Exam
Summer 1989

Answer Question 1 or Question 2, not both:

  1. Sam Hollander argues that David Ricardo’s Principles is really a neoclassical analysis (such as Marshall’s), although written in a different style and laying different amounts of emphasis upon various parts of the theory (for example, more emphasis on cost, less on demand).
    1. If this is true of Ricardo, why not also of Adam Smith? How do these two differ?
    2. What is neoclassical (Marshallian) or not neoclassical about Ricardo’s treatment of wages on average, or of wages in individual occupations?
  2. In his recent review of Samuel Hollander’s study of J. S. Mill, Pedro Schwartz argued that Hollander failed to see that J.S. Mill had a very different view of the scope of economics than Smith or Ricardo. Mill “treated (economics) as a limited science whose rationale is irreconcilable to the guiding principles of ethics and politics.”

From your knowledge of Mill’s Principles, defend Schwartz or Hollander.

Answer all of the remaining questions:

  1. Do people know what is good for them? Show how Smith and J.S. Mill draw their conclusions on this question.
  2. Arguments have often persisted for long periods over what an economist really meant. Ricardo is a favorite example, but there is hardly an economist of note who has escaped this sort of dispute. Compare the roles of…
    1. …a careful analysis of what the economist meant (relying on his writings, letters, etc.)…
    2. …a careful analysis of what his contemporaries and immediate successors thought he meant…

…in resolving such disputes. Which is the more important basis of judgment, and why? Apply both techniques to Malthus’ use of the arithmetic and geometric ratios.

  1. “Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command…the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society.
    First, every individual endeavors to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry.
    Thus, upon equal or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade. …In the home trade his capital is never so long out of his sight as it frequently is in the foreign trade…yet for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge (double charge of loading and unloading as well as to the payment of some duties and customs).”

In this passage, famous for arguing free trade, Smith seems to make a case (a) for preferring domestic industry to foreign trade, and (b) to define the advantage of “society” as that of one’s own nation. Is Smith not an advocate of free trade?

  1. Read all the way through this question before beginning your answers.
    1. In explaining the advance of knowledge in a science, one must choose between:
      1. The Kuhnsian view of revolutions, which says that wholly new paradigms (incommensurable with earlier paradigms) work major revolutions such as that of Marginal Utility, and
      2. All science is basically cumulative (which Kuhn believes is true only of “normal” science within a paradigm).
        Appraise these alternatives.
    2. Again, in explaining progress in a science one must choose between:
      1. A “great man” theory, in which a genius (he’s one by definition) makes a fundamental contribution and lesser scholars fill in the details, and
      2. The science has a main direction that is the product of the whole community of scholars. If a theory needs to be invented or discovered, one or more scholars will do so (Robert Merton).
        Again, appraise these alternatives.
    3. In both parts above, try to illustrate your argument by an episode in economics—preferably from this century. Thus, the theory of the firm, statistical study of economic functions, oligopoly theory, Keynes’ General Theory, monetarism, etc., are examples.

 

Source: University of Chicago Archives. George Stigler Papers, Addenda. Box 33 (2005-16), Folder “Misc. Course Materials. History of Economic Th[ought].”

Image Source: Posted by Glory M. Liu on her personal research webpage (next to the abstract for her article “Rethinking the Chicago Smith Problem: Adam Smith and the Chicago School, 1929-1980” published in Modern Intellectual History.

Categories
Chicago Exam Questions Fields History of Economics

Chicago. History of Economic Thought Ph.D Field Exam. Summer, 1974

 

The following examination consisting of six questions (answer five) comes from George Stigler’s papers at the University of Chicago Archives. It is safe to assume that Stigler penned these questions. 

The questions from the 1989 prelim on the History of Economic Thought are found in the following post.

________________________

History of Economic Thought
Summer, 1974

WRITE IN BLACK INK

WRITE THE FOLLOWING INFORMATION ON THE FIRST PAGE OF YOUR EXAMINATION PAPER:

— Your code number and not your name
— Name of examination
— Date of examination

Write only on one side of each page.

Write the following information on each following page of your examination paper:

— Top left: code number
— Top right: number of page

When you fold your paper at the end of the exam, write your code number on the back of the last page, and indicate total number of pages.

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

 

Write on five of the following questions.

  1. John Stuart Mill is undergoing a rehabilitation of reputation after long being viewed as a pallid synthesizer of classical doctrines. Is this improved reputation deserved?
  2. Precisely how is the product-after-deduction-of-rent divided between labor and capital in the Ricardian system? Is the short run division different from the long run division? Is the system in equilibrium?
  3. Jevons is the founder of quantitative economics. What is the basis for this claim? Why did this type of work appear as late (or early?) as the 1860’s?
  4. Smith rated some forms of investment as socially preferable to others. What was his ranking of agriculture, manufactures and trade? Was his analysis valid?
  5. John A. Hobson, N. Lennin [sic], and others have authored theories of imperialism, which, in spite of various differences, have in common the proposition that modern expansionist wars and diplomatic entanglements are a consequence of the economic structure and dynamics of capitalism. Against this point of view, it has been argued that aggressive expansionism is much older than modern capitalism, and that economic interests have been used as a pawn of the political ambitions of statesmen. What kind of evidence would you regard as valid to evaluate the appropriateness of either type of theory on the relationships between economic change and war.
  6. Malthus’ gloomy prediction that the standard of living could not rise above a subsistence level proved wrong with respect to the Western world. List as many reasons as you can to account for this. Also, state as precisely as possible how Western population trends of the past two centuries can be related to (a) the law of diminishing returns and (b) shifts in production-possibility frontiers.

 

Source:  University of Chicago Archives. George Stigler Papers, Addenda. Box 33 (2005-16), Folder: “Exams & Prelim Questions.”

Image Source:  George Stigler page at the University of Chicago Booth School of Business website.

Categories
Chicago Exam Questions

Chicago. Price Theory. Ph.D. Core Examination. Summer, 1975

 

Graduate prelimary examinations for price theory at the University of Chicago for 1964 and 1969 have been transcribed and posted earlier. Economics in the Rear-view Mirror now adds the Summer quarter, 1975 exam to its stock of transcribed Chicago examinations.

__________________________________

Ph.D. Core Examination
PRICE THEORY
Summer, 1975

*  *  *  *  *  *  *  *  *

INSTRUCTIONS:

Write in black ink and write only on one side of each page.

Write the following information on the first page of your exam paper:

      • Name of examination
      • Date of examination
      • Your code number and not your name

Write the following information on each page of your examination paper:

      • Upper left: code number
      • Upper right: number of page

When you fold your paper at the end of the exam, write your code number on the back of the last page, and indicate total number of pages.

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

ANSWER ALL QUESTIONS. TIME: 3 HOURS

*  *  *  *  *  *  *  *  *

  1. (60 minutes, 5 per item) Indicate whether each of the following statements is TRUE, FALSE, or UNCERTAIN. In each case write a few sentences explaining your answer. Your grade will be determined by your explanation.
    1. It is immediately obvious that if the firm has any significant degree of monopoly power, sales maximization would be better for the rest of the economy than profit maximization.
    2. When a firm increases its price because its raw material costs have risen, the buyers accept the price increase more readily.
    3. If A and B are produced in fixed proportions and consumed in fixed proportions, one of the two will be free.
    4. Marshall asserts that the rents of different qualities of agricultural land will approach equality as the economy grows in population and wealth.
    5. An industry whose output is increasing cannot be making negative profits.
    6. The prohibition on environmental pollution by (say) a factory cannot increase national income.
    7. A competitive industry is more likely to cartelize when the probability of expropriation increases.
    8. Regulation of a competitive industry by the government will decrease the probability of cartelization.
    9. In the social security systems of most countries, the age of retirement after which old age pensions are “payable” is lower for women than for men (usually 60 as compared with 65 years of age), even though on the average women live significantly longer than men. This is a clear case of discrimination against men, which should be protested by the Men’s Liberation Movement.
    10. The U.S. personal income tax system allows married couples to “split” their aggregate income equally and pay tax on the results at the same rates as single people would. This is a clear case of discrimination in favor of heterosexuality that should be vigorously protested by the Gay Liberation front.
    11. If the elasticity of supply is less than unity, and the elasticity of substitution in production greater than unity, a fall in the price of a factor must increase the demand for it.
    12. Labor can be “Exploited” only if there is monopoly in the product market.
  2. (25 minutes)
    In most states it is illegal for drug stores to advertise the prices of prescription drugs. A customer can find out the price of a prescription drug only by asking the pharmacist in person. In addition only pharmacists licensed by the state are allowed to dispense drugs and every drug store must employ at least one licensed pharmacist. One can become a licensed pharmacist by passing an examination administered by the state and written by a board of pharmacists. Finally, a pharmacist must fill a prescription exactly as it is written by the physician and may not substitute a generically equivalent drug.

    1. What would happen if pharmacists were allowed to advertise the prices of prescription drugs?
    2. What would happen to the price of drugs if pharmacists were allowed to substitute any drug from a specified list in place of the prescribed drug?
  1. (25 minutes)
    We are presently importing considerable oil at the $10 barrel price, and producing domestically at a free price from new wells and a $5 price from “old” wells (on amounts they produced before the oil price rises).

    1. What would be the effect on domestic price of a higher tariff on imports? On what would the magnitude of the price rise depend?
    2. What would be the effect on domestic price of a removal of the price ceiling on “old” oil? On what would the magnitude of this price effect depend?
  2. (25 minutes)
    Translate into the apparatus of indifference curves and budget lines the following phenomena:

    1. The individual likes good music more, the more he hears.
    2. The individual has monopsonistic power with respect to one commodity.
    3. (a) The consumption of the two commodities (however spaced) is poisonous.
      (b) The consumption of either commodity alone is poisonous.
    4. The individual cannot afford one of the commodities.
    5. (a) One of the commodities yields increasing marginal utility.
      (b) Both do.
  3. (20 minutes)
    1. Assume there is an exhaustible resource that can be extracted at a constant marginal cost c. Assume there is a competitive industry that extracts this resource. Derive the behavior of the equilibrium price over time if the demand schedule for the product remains constant over time.
    2. Under the same demand and cost conditions, derive the equilibrium price if the resource is controlled by a single firm.
  4. (25 minutes)
    Ontario imposes a tax of 30 percent on the sale or bequest of any land to non-Canadians. What are the effects of such a tax on:

    1. Landowners, Canadian and non-Canadian;
    2. Non-landowners, Canadian and non-Canadian.
      What will the effect be if leases are not regulated?

Source:  University of Chicago Archives. George Stigler Papers, Addenda. Box 33 (2005-16), Folder: “Exams & Prelim Questions.”

Image Source: The Quarter-Centennial Celebration of the University of Chicago (1916).

Categories
Exam Questions Johns Hopkins M.I.T. Suggested Reading Syllabus

M.I.T. Readings and exam questions for fiscal and monetary policy. Domar, 1957

Evsey Domar’s first semester at M.I.T. was as a visiting professor according to the teaching records of the economics department. He taught one seminar on Russian Economics (14.292) and a graduate course with the nominal title “Fiscal Policy”. That course had been taught previously by E. Cary Brown (Spring 1954, 1955) and R. A. Musgrave, visiting Professor (Spring 1956).

Inspection of the ten-page course bibliography and the final examination questions along with two note-cards filed with these course materials, it appears that well over half the course was in all likelihood dedicated to fiscal policy topics with monetary policy for stabilization topics accouting for perhaps one-third of the course. Just as the length of the course bibliography (typical for Domar) is daunting, his use of asterisks to designate recommended reading was exceedingly liberal. An examination of the final examination questions leads me to conclude that it should be rather easy to reduce the course reading list (for examination purposes!) to less than two pages.

___________________________

Course Enrollment
(Second term, 1956-57

Instructor

Domar, E. D.
Rank

Prof. (Visit.)
Subj. No.

14.472
Subj. Title

Fiscal Policy
No. Class Hours/Week

3
No. Students

22

Source: M.I.T. Archives, Department of Economics Records 1947-, Box 3, Folder “Teaching Responsibility”.

___________________________

Typed notecards for an introduction to or a review of course.

The traditional arguments regarding the purposes of Monetary Policy:

  1. Stabilization of general prices or of factor earnings—the Wicksell-Davidson controversy. The instrument was the relation between the natural and the market rates.
  2. Stabilization of prices or of employment. Recent literature is full of this.
  3. Stabilization of the general prices or of prices of Federal securities. See Douglas’s and other reports on this recent controversy.
  4. Stabilization of employment or the achievement of growth. Any conflict?
  5. Discretionary methods or automatic provisions? See Simons’ article in Readings in Monetary Theory.
  6. To provide credit and currency, sound and in sufficient quantity.
  7. To protect the international position of the country.
  8. To have special effects, such as:

a. by region
b. by industry
c. by commodity consumed (such as tobacco) or housing
d. on population (by giving exemptions or subsidies for dependents)

  1. Provide revenue [handwritten addition]
  2. Distribution of income [handwritten addition]

*  *  *  *  *  *  *  *  *  *  *  *  *

The following limitations, some real, other imaginary, explain why Fiscal Policy is not as simple as Lerner makes it:

Income distribution
Size of the deficit
Size of the budget
Balance of payments
Special regional and industrial effects
Effects on incentives to work (in inflation)
Automaticity of the system (built-in-flexibility)
Monetary effects (on reserves, deposits)
Long-run effects (on growth and development)

Their presence complicates things and explains all the ingenious articles and tax devices frequently suggested. If not for them, fiscal policy would be very simple indeed: cut taxes or increase taxes, and the same with expenditures.

___________________________

READING LIST
14.472 Fiscal Policy
Spring Term 1956-57

Professor E. D. Domar

PART I—MONETARY POLICY

The purpose of this list is to suggest to the student the sources in which the more important topics in Monetary Policy are discussed from many points of view. His objective should be the understanding of these topics and not the memorization of who said what.

Most of the sources listed here, and particularly the Congressional materials, discuss a number of questions not only in Monetary but in Fiscal Policy as well. Hence it is difficult to classify them.

Items marked with an * are strongly recommended. (I don’t like to use the expression “required” in a graduate reading list.)

  1. Factual Materials on Monetary Problems

Federal Reserve Bulletin.

Treasury Bulletin.

Annual Reports of the Secretary of the Treasury and of the Board of Governors of the Federal Reserve System.

Historical Statistics of the United States, 1789-1945, and the Continuation to 1952.

Congressional Hearings, Reports and other Materials listed below.

  1. Introduction

Hart, Albert Gailord, Money, Debt and Economic Activity, New York 1948.

Hicks*, J. R., “A Suggestion for Simplifying the Theory of Money,” Economica, 1935; reprinted in Readings in Monetary Theory.

Lerner*; Abba P., “Functional Finance and the Federal Debt,” Social Research, 1943, and Readings in Fiscal Policy, p. 468, also Chapter 24 in his Economics of Control, New York, 1944.

Poole, Kenyon E., ed. Fiscal Policies and the American Economy.

Sproul* Allan, “Changing Concepts of Central Banking,” Money, Trade and Economic Growth in Honor of John Henry Williams, New York, 1951.

  1. Monetary Theory and Growth

Gurley*, John G. and Shaw, E. S., “Financial Aspects of Economic Development,” American Economic Review, September 1955, pp. 515-538.

  1. Effectiveness of the Interest Rate

Ebersole*, J. F., “The Influence of Interest Rates,” Harvard Business Review, XVII, i, 1938, pp. 35-39.

Henderson*, R. D., “The Significance of the Rate of Interest,” Oxford Economic Papers, October 1938, I, pp. 1-13.

*Meade, J. E. and Andrews, P. W. S., “Summary of Replies to Questions on Effects of Interest Rates,” Oxford Economic Papers, October 1938, I, pp. 14-31.

Sayers, R. S. “Business Men and the Terms of Borrowing,” Oxford Economic Papers, Feb. 1940, III, pp. 23-31.

Andrews, P. W. S., “A Further Inquiry into the Effects of Rates of Interest,” Oxford Economic Papers, Feb. 1940, III, pp. 32-73.

White*, William H., “Interest Inelasticity of Investment Demand—The Case from Business Attitude Survey Re-Examined,” American Economic Review, September 1956, pp. 565-87.

Lutz, Friedrich A., “The Interest Rate and Investment in a Dynamic Economy,” American Economic Review, Dec. 1945.

  1. General Surveys of Monetary Policy

Federal Reserve Board*, Tenth Annual Report for 1923. See pp. 29-39 particularly.

Chandler*, Lester V., “Federal Reserve Policy and the Federal Debt,” American Economic Review, 1949, and Readings in Monetary Theory, p. 394.

Hardy, Charles O., “Fiscal Operations as Instruments of Economic Stabilization,” American Economic Review, Supplement, 1948, pp. 395-403 and Readings in Monetary Theory, p. 394.

Hart, Albert Gailord, “Monetary Policy for Income Stabilization,” Income Stabilization for a Developing Democracy, ed. by Max F. Millikan, New Haven, 1953.

Williams, John H., “The Implications of Fiscal Policy for Monetary Policy and the Banking System,” AER Proceedings, March 1942; Readings in Fiscal Policy, p. 185.

Smith*, Warren L., “On the Effectiveness of Monetary Policy,” American Economic Review, September 1956, pp. 588-606.

  1. Suggested Objectives and Policies

Hammarskjold, Dag, “The Swedish Discussion on the Aims of Monetary Policy,” reprinted in International Monetary Papers, No. 5, pp. 145-154.

Simons*, Henry C., “Rule versus Authorities in Monetary Policy,” JPE, 1936, and Readings in Monetary Theory, p. 337.

Simons, Henry, “On Debt Policy,” JPE, Dec. 1944, and Readings in Fiscal Policy.

Mints*, Lloyd, W., “Monetary Policy,” Review of Econ. and Stat., 1946 and Readings in Fiscal Policy, p. 344.

Bach*, G. L., “Monetary-Fiscal Policy Reconsidered,” JPE, Oct. 1949, and Readings in Fiscal Policy.

Friedman*, Milton, “A Monetary and Fiscal Framework for Economic Stability,” American Economic Review, 1949, and Readings in Monetary Theory, p. 369.

*United Nations. National and International Measures for Full Employment. Report by a group of experts appointed by the Secretary-General (Lake Success, New York, December 1949).

Viner*, Jacob, “Full Employment at Whatever Cost,” QJE, August 1950, pp. 385-407. Reproduced with omissions in Economic Policy, Readings in Political Economy, edited by William D. Grampp and Emanuel T. Weiler, Homewood, Ill., 1956, pp. 54-65.

Samuelson* Paul A., “Principles and Rules in Modern Fiscal Policy: A New-Classical Reformulation,” Money, Trade and Economic Growth in Honor of John Henry Williams, New York, 1951.

Seltzer* Lawrence H., “Is a Rise in Interest Rates Desirable or Inevitable,” American Economic Review, Dec. 1945; Readings in Fiscal Policy, p. 202.

Roosa, Robert V., “Interest Rates and the Central Bank,” Money, Trade and Economic Growth in Honor of John Henry Williams, 1951.

Roosa*, Robert V., “Integrating Debt Management and Open Market Operations,” American Economic Review, 1952, and Readings in Fiscal Policy, p. 265.

Hansen*, Alvin H., “Monetary Policy,” The Review of Economics and Statistics, May 1955, pp. 110-119.

  1. Commodity Money

Graham, Benjamin, World Commodities and World Currency, New York 1944.

Graham*, Frank D., “Full Employment without Public Debt, Without Taxation, Without Public Works, and without Inflation,” Planning and Paying for Full Employment, edited by Abba P. Lerner and Frank D. Graham, 1946.

  1. Congressional Materials

Joint Committee on the Economic Report. Money, Credit, and Fiscal Policies. Hearings before the Subcommittee on Monetary, Credit and Fiscal Policies of the Joint Committee on the Economic Report, 81st Congress, First Session, September 23, November 16,17,18,22,23 and December 1,2,3,5,7, 1949.

Joint Committee on the Economic Report. Monetary, Credit, and Fiscal Policies. A Collection of Statements Submitted to the Subcommittee on Monetary, Credit and Fiscal Policies by Government Officials, Bankers, Economists, and Others. 1949.

Joint Committee on the Economic Report (The Douglas Subcommittee). A Compendium of Materials on Monetary, Credit, and Fiscal Policies. A Collection of Statements Submitted to the Subcommittee on Monetary, Credit, and Fiscal Policies by Government Officials, Bankers, Economists, and Others. 81st Congress, 2ndSession, Senate Document No. 132, 1950.

Joint Committee on the Economic Report*. Monetary, Credit, and Fiscal Policies. Report of the Subcommittee on Monetary, Credit, and Fiscal Policies of the Joint Committee on the Economic Report. 81st Congress, 2ndSession, Senate Document No. 129, 1950.

Joint Committee on the Economic Report. Monetary Policy and the Management of the Public Debt Hearings before the Subcommittee on General Credit Control and Debt Management of the Joint Committee on the Economic Report, 81st Congress, 2nd Session, March 1952.

Joint Committee on the Economic Report. Monetary Policy and the Management of the Public Debt. Their Role in Achieving Price Stability and High-Level Employment. Replies to questions and other material for the use of the subcommittee on general credit control and debt management. 82nd Congress, 2nd Session, Senate Document No. 123, 1952.

Joint Committee on the Economic Report. Monetary Policy and the Management of the Public Debt Report of the Subcommittee on General Credit Control and Debt Management of the Joint Committee on the Economic Report, 82nd Congress, 2nd Session, 1952.

Joint Committee on the Economic Report. United States Monetary Policy: Recent Thinking and Experience Hearings before the Subcommittee on Economic Stabilization of the Joint Committee on the Economic Report. 83rd Congress, 2nd Session, December 6 and 7, 1954.

Joint Committee on the Economic Report. January 1956 Economic Report of the President. Hearings before the Joint Committee on the Economic Report. 84th Congress, 2nd Session, January 31, February 1,2,3,6,7,8,9,14,15,17 and 28, 1956.

Joint Committee on the Economic Report*. Conflicting Official Views on Monetary Policy; April 1956. Hearings before the Subcommittee on Economic Stabilization of the Joint Committee on Economic Report, 84thCongress, 2nd Session, June 12, 1956.

  1. Readings for Amusement

Outside Readings in Economics, second edition. Selected by Hess, Arleigh P. Jr., Gallman, Robert E., Rice, John P., and Stern, Carl, New York, 1956. The “Dialogue on Money,” by D. H. Robertson; “The Island of Stone Money,” by William H. Furness III; “The Paper Money of Kubla Khan,” by Marco Polo; and “The Edict of Diocletian,” by Humphrey Mitchell, pp. 314-335 are very amusing and instructive.

 

PART II—FISCAL POLICY

See the remarks in Part I.

  1. Factual Materials of General Character

Joint Committee on the Economic Report.* The Federal Revenue System: Facts and Problems, 1956

Treasury Bulletin

Annual Reports of the Secretary of the Treasury and of the Commissioner of Internal Revenue

Statistical Abstract of the United States

Historical Statistics of the United States, 1789-1945 (published by the U. S. Bureau of the Census)

U. S. Treasury Department, Internal Revenue Service, Statistics of Income (an annual publication in two volumes)

U. S. Bureau of the Census, Summary of Governmental Finances (annual series)

The Budget of the U. S. Government

Commerce Clearing House, Inc., Tax Systems

West Publishing Co., Federal Tax Regulations, 1956

Congressional Hearings and Reports, listed in Part I and below

Textbooks on Public Finance and Fiscal Policy

  1. Historical Studies

Ratner, S., American Taxation: Its History as a Social Force in a Democracy, New York, 1942

Fabricant*, S., The Trend of Government Activity in the United States since 1900, New York, 1952, Chapters 1, 6, 7

Studenski, P. and H. E. Kroos, Financial History of the United States, New York, 1952

Musgrave*, R. A. and J. M. Culbertson, “The Growth of Public Expenditures in the United States,” National Tax Journal, June, 1953, pp. 97-115

Paul, R. E., Taxation in the United States, Boston, 1954

  1. Fundamental Assumptions

Hansen*, A. H., “The Stagnation Thesis,” Fiscal Policy and the Business Cycle, New York, 1941, pp. 38-46, and Readings in Fiscal Policy

Schumpeter*, J. A., “Economic Possibilities in the United States,” Capitalism, Socialism, and Democracy, 1947, and Readings in Fiscal Policy

Domar*, E. D., “The Problem of Capital Accumulation,” The American Economic Review, December, 1948

Fellner*, W., “Relative Emphasis in Tax Policy on Encouragement of Consumption or Investment,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D.C., November 9, 1955, p. 210

Hansen*, A. H., “Economic Stability and Growth,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 14

Smithies*, A., “Economic Growth as a Policy Objective,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 32.

  1. General Objectives and Policies

Keynes* J. M., “An Open Letter,” The New York Times, 1933, and Readings in Fiscal Policy

Lerner*, A. P., “Functional Finance and the Federal Debt,” Social Research, 1943, and Readings in Fiscal Policy. Also Chapter 24 in his Economics of Control, New York, 1944

Hart, A. G., “’Model-Building’ and Fiscal Policy,” American Economic Review, 1945, and Readings in Fiscal Policy

Committee for Economic Development, “Taxes and the Budget: A Program for Prosperity in a Free Economy,” Readings in Fiscal Policy, 1947

Colm* G., “The Government Budget and the Nation’s Economic Budget,” Public Finance, 1948, and Readings

Friedman*, M., “A Monetary and Fiscal Framework for Economic Stability,” American Economic Review, 1948, and Readings

National Planning Association, “Federal Expenditure and Revenue Policy for Economic Stability,” 1949, Readings

Bach*, G. L., “Monetary-Fiscal Policy Reconsidered,” Journal of Political Economy, October, 1949, and Readings

United Nations*, National and International Measures for Full Employment (report by a group of experts appointed by the Secretary-General), Lake Success, New York, December, 1949

Simons*, H. C., Federal Tax Reform, Chicago, 1950

Viner*, J., “Full Employment at Whatever Cost,” The Quarterly Journal of Economics, August, 1950

Samuelson*, P. A., “Principles and Rules in Modern Fiscal Policy; A Neoclassical Reformulation,” Money, Trade, and Economic Growth: in Honor of John H. Williams, New York, 1951

Millikan, M., ed., Income Stabilization for a Developing Democracy, Yale, 1953

Rolph, E.R., The Theory of Fiscal Economics, Berkeley and Los Angeles, 1954

U. S. Congress, Joint Committee on the Economic Report, Federal Tax Policy for Economic Growth and Stability, December, 1955, Hearings

American Economic Association* Readings in Fiscal Policy, Homewood, Illinois, 1955

National Bureau of Economic Research, Policies to Combat Depression, a conference of the Universities-National Bureau Committee for Economic Research, 1956

Council of Economic Advisers*, the latest Annual Report

  1. Institutional Factors

Bailey, S. K., Congress Makes a Law: the Story behind the Employment Act of 1946, New York, 1950

Bailey, S. K. and H. D. Samuel, Congress at Work, New York, 1952

Blough, R., The Federal Taxing Process, New York, 1952

Smithies*, A., The Budgetary Process in the United States, Committee for Economic Development, New York, 1955

  1. Tax Incidence

Musgrave*, R. A., et al, “Distribution of Tax Payments by Income Groups,” National Tax Journal, March, 1951

Little, I. M. D., “Direct versus Indirect Taxes, Economic Journal, September, 1951

Musgrave*, R. A., “On Incidence,” Journal of Political Economy, August, 1953

Bach*, G. L., “The Impact of Moderate Inflation on Income and Assets of Economic Groups,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 71

Musgrave*, R.A., “Incidence of the Tax Structure and its Effects on Consumption,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 96

  1. Cyclical Aspects

Slichter*, S. H., “The Economics of Public Works,” American Economics Review, 1934, and Readings in Fiscal Policy

Lutz, H. L., “Federal Depression Financing and its Consequences,” Harvard Business Review, 1938, and Readings

Myrdal* G., “Fiscal Policy in the Business Trade,” American Economic Review Supplement, 1939, and Readings

Hagen, E. E., “Timing and Administering Fiscal Policy,” American Economic Review, May, 1948

Committee on Public Issues of the American Economic Association*, “The Problem of Economic Instability,” American Economic Review, 1950, and Readings

Smithies*, A., “The American Economic Association Committee Report on Economic Instability,” American Economic Review, 1951, and Readings

Phillips, A. W., “Stabilization Policy in a Closed Economy,” The Economic Journal, June, 1954, pp. 290-323

Committee for Economic Development*, Problems in Anti-Recession Policy, September 1954

  1. Alternative Budgets for Full Employment

Kaldor*, N., Appendix C in W. H. Beveridge, Full Employment in a Free Society, 1945

Musgrave*, R. A., “Alternative Budget Policies for Full Employment,” American Economic Review, 1945, and Readings

Musgrave*, R. A. and M. H. Miller, “Built-In Flexibility,” American Economic Review, 1948 and Readings

Bishop*, R. L., “Alternative Expansionist Policies,” Income, Employment and Public Policy: Essays in Honor of Alvin H. Hansen, New York, 1948

Stein, H., “Budget Policy to Maintain Stability,” Problems in Anti-Recession Policy, Committee for Economic Development, September, 1954

Hagen*, E. E., “Federal Taxation and Economic Stabilization,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, November 9, 1955, pp. 58-70

Lusher, D. W., “The Stabilizing Effectiveness of Budget Flexibility,” Policies to Combat Depression, a conference of the Universities-National Bureau Committee for Economic Research, Princeton, 1956

  1. Balanced Budget Multiplier

Wallich*, H. C., “Income-Generating Effects of a Balanced Budget,” Quarterly Journal of Economics, November, 1944

Haavelmo*, T., “Multiplier Effects of a Balanced Budget,” Econometrica, 1945, and Readings

Haberler, G., “Multiplier Effects of a Balanced Budget,” Econometrica, April, 1946

Baumol, W. J. and M. H. Preston, “More on the Multiplier Effects of a Balanced Budget under Full Employment,” American Economic Review, March, 1955

  1. The National Debt

Studenski, P., “The Limits of Possible Debt Burdens—Federal, State, and Local,” American Economic Review, Supplement, 1937

Haley*, R. F., “The Federal Budget: Economic Consequences of Deficit Financing,” American Economic Review, 1941, and Readings

Williams*, H. H., “Deficit Spending,” American Economic Review, February, 1941 and Postwar Monetary Plans and other Essays, 1944

Ratchford, B. U., “The Burden of a Domestic Debt,” American Economic Review, 1942, and Readings

Williams, J. H., “The Implications of Fiscal Policy for Monetary Policy and the Banking System,” Proceedings of the American Economic Association, 1942, and Readings

Domar*, E. D., “The ‘Burden of the Debt’ and the National Income,” American Economic Review, 1944, and Readings

Simons*, H., “On Debt Policy,” Journal of Political Economy, 1944, and Readings

Seltzer, L. H., “Is a Rise in Interest Rates Desirable or Inevitable?” American Economic Review, 1945, and Readings

Wallich, H. C., “Debt Management as an Instrument of Economic Policy,” American Economic Review, June, 1946

Roosa, R. V., “Integrating Debt Management and Open Market Operations,” American Economic Review, 1952, and Readings

Burkhead*, J., “The Balanced Budget,” Quarterly Journal of Economic, 1954, and Readings

  1. Inflation and War Finance

Sprague, O. M. W., “Loans and Taxes in War Finance,” American Economic Review, Proceedings, 1917, and Readings

Keynes*, J. M., How to Pay for the War, London, 1940

Smithies*, A., “The Behavior of Money National Income under Inflationary Conditions,” Quarterly Journal of Economics, 1942, and Readings

Fellner*, W. J., “Postscript on War Inflation: A Lesson from World War II,” American Economic Review, 1947, and Readings

Fetter*, F., “The Economic Reports of the President and the Problem of Inflation,” Quarterly Journal of Economics, 1949, and Readings

Wald, H. P., “Fiscal Policy, Military Preparedness, and Postwar Inflation,” National Tax Journal, 1949, and Readings

Hart, A. G., Defense Without Inflation, New York, 1951

  1. Effect on Incentives: Incentive Taxation

Domar*, E. D., and R. A. Musgrave, “Proportional Income Taxation and Risk Taking,” Quarterly Journal of Economic, May, 1954

Butters, J. K., and J. Lintner, Effect of Federal Taxes on Growing Enterprises, Boston, 1945

Groves*, H. M., Postwar Taxation and Economic Progress, New York, 1946, Chapter 11

Shelton, J. P., and G. Ohlin, “A Swedish Tax Provision for Stabilizing Business Investment,” American Economic Review, June, 1952

Brown*, R. S., “Techniques for Influencing Private Investment,” Income Stabilization in a Developing Democracy, M. Millikan, ed., 1953, pp. 416-432

Domar*, E. D., “The Case for Accelerated Depreciation,” Quarterly Journal of Economics, February, 1953

Butters*, J. K., “Taxation, Incentives, and Financial Capacity,” American Economic Review, Supplement, 1954, and Readings

Brown, E. C., “The New Depreciation Policy under the Income Tax: An Economic Analysis,” National Tax Journal, March, 1955

Goode*, R., “Accelerated Depreciation Allowances as a Stimulus to Investment,” Quarterly Journal of Economics, May, 1955

Break*, G. F., “Effects of Taxation on Work Incentives,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 192

Brown*, E. C., “Weaknesses of Accelerated Depreciation as an Investment Stimulus,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 495

Butters*, J. K., “Effects of Taxation on the Investment Capacities and Policies of Individuals,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 126

Greenewalt*, C. H., “Effect of High Tax Rates on Executive Incentive,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 185

Long*, C. D., “Impact of Federal Income Tax on Labor Force Participation,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 153

Kaldor*, N., “An Expenditure Tax,” London, 1955

  1. Particular Taxes

Simons, H., Personal Income Taxation, Chicago, 1938

Brown*, E. C., “Analysis of Consumption Taxes in Terms of the Theory of Income Determination,” American Economic Review, March, 1950

Goode*, R., Corporation Income Tax, New York, 1951

Royal Commission on the Taxation of Profits and Income, First Report, February, 1953; Second Report, April, 1954; Final Report, June, 1955

Due, J. F., “Economics of Commodity Taxation and the Present Excise Tax System,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 547

Keith*, G., “Economic Impact of the Corporation Income Tax,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 658

Goode, R., “The Corporate Income Tax in a Depression,” Policies to Combat Depression, a conference of the Universities-National Bureau Committee for Economic Research, 1956

Merriam, I. C., “Social Security Programs and Economic Stability,” Policies to Combat Depression

Pechman, J. A., “Yield of the Individual Income Tax During A Recession,” Policies to Combat Depression

  1. Inter-Governmental Fiscal Relations

Maxwell*, J. A., “Intergovernmental Fiscal Devices for Economic Stabilization,” Federal Tax Policy for Economic Growth and Stability, Joint Committee on the Economic Report, Washington, D. C., November 9, 1955, p. 807

Heer*, C., “Stabilizing State and Local Finance,” Policies to Combat Depression, 1956

U. S. Treasury Department, Committee on Inter-Governmental Fiscal Relations, Federal, State, and Local Government Fiscal Relations, 78th Congress, 1st Session, Senate Document No. 69, 1943

U. S. Bureau of the Census, Compendium of State Government Finances (an annual series)

Same source, Compendium of City Government Finances (an annual series)

Tax Institute, Federal-State-Local Tax Correlation (A Symposium), December, 1953

The Council of State Governments, Federal Grants-in-Aid, 1949

  1. Growth and Economic Development

Bernstein*, E. M. and I. G. Patel, “Inflation in Relation to Economic Development,” International Monetary Fund, Staff papers, II, 1951-52

United Nations*: Fiscal Division, “Taxation and Economic Development in Asian Countries,” Economic Bulletin for Asia and the Far East, Vol. IV, November, 1953

Gurley, J. A., “Fiscal Policy in a Growing Economy,” Journal of Political Economy, December, 1953

Papers and Proceedings of the Conference on Agricultural Taxation and Economic Development, H. P. Wald, and J. N. Froomkin, eds., Cambridge, Massachusetts, 1954 (Harvard University Law School, International Program in Taxation)

  1. Special Problems

Clark*, C., “Public Finance and Changes in the Value of Money,” The Economic Journal, December, 1945

Clark*, C., “The Danger Point in Taxes,” Harper’s Magazine, December, 1950

Goode*, R., “An Economic Limit on Taxes: Some Recent Discussion,” National Tax Journal, September, 1952

Caplan, B., “A Case Study: The 1948-1949 Recession,” Policies to Combat Depression, 1956

Fox, K. A., “The Contribution of Farm Price Support Programs to General Economic Stability,” Policies to Combat Depression, 1956

Gordon, R. A., “Types of Depressions and Programs to Combat Them,” Policies to Combat Depression

Grebler, L., “Housing Policies to Comat Depression,” Policies to Combat Depression

Johnson, D. G., “Stabilization of International Commodity Prices,” Policies to Combat Depression

Owen, W., “Self-Liquidating Public Works to Combat Depression,” Policies to Combat Depression

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Box 17, Folder “Fiscal and Monetary Policy”.

___________________________

FINAL EXAMINATION
14.472 Fiscal Policy
Monday, May 20, 1957

E. D. Domar

ANSWER ALL QUESTIONS. THE QUALITY OF YOUR REASONING IS THE MOST IMPORTANT PART OF YOUR ANSWERS.

  1. [35%] Compare and contrast monetary and fiscal policies as methods of achieving a steadily expanding economy (without inflation or depression). Include, but don’t limit yourself to, the following points:
      1. The theoretical foundation of each.
      2. Methods used.
      3. Effects on distribution of income and wealth.
      4. Social and political repercussions of each.
      5. The effectiveness and limitations of each.

Do they overlap? Can you work out a synthesis?

  1. [20%] “Government spending tends to be like a drug, in that it takes larger and larger doses to get results, and all the time debt and taxes get higher and higher.”
    Analyze this statement and comment as fully as you can. Compare the effect of government expenditures with that of private.
  2. [15%] “The best cure against inflation is increased production.”
    Analyze this statement and comment on it. Include in your comments the monetary and fiscal implications of this statement.
  3. [15%] What are the so-called “Built-in-Stabilizers?” Discuss fully and indicate how they operate in (a) depression and (b) inflation.
  4. [15%] “The purpose of taxation is never to raise money but to leave less in the hands of the taxpayer.”
    Comment fully and indicate the limitations of this statement. Can you identify the author? (No great penalty if you cannot.)

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Box 16, Folder “Examination. Public Finance and Fiscal Policy”.

Notes on Final Exam:

Question II comes from a review of Stuart Chase, Where’s the Money Coming From? Published in the Monthly Bulletin of the National City Bank of New York that I was fortunate to find inserted into the Congressional Record Volume 93—Part 4 (May 8, 1947, p. 4827);

Question III. Domar liked this question enough to have used it at least twice. See January 23, 1958 Exam at Johns Hopkins; January 26, 1966 at M.I.T.;

Question V. The sentence quoted comes from Abba Lerner’s The Economics of Control, p. 307.

___________________________

Image Source: Evsey D. Domar at the MIT Museum legacy website.

 

Categories
Economic History Exam Questions Harvard

Harvard. Final exams for European and U.S. Economic History. Gay and Klein, 1910-1911

This post adds  final examinations for the 1910-11 academic year to previous posts dedicated to two economic history courses taught by Edwin F. Gay during the second decades of the twentieth century at Harvard. 

_____________________

Instructors: Edwin F. Gay, Julius Klein

Biographical information

_____________________

Reading list: First term, 1910-11.
Economics 6a.

European Industry and Commerce in the Nineteenth Century.

Final exam. First term, 1910-11.
Economics 6a.

[European Industry and Commerce in the Nineteenth Century]

  1. (a) “The essence of the industrial revolution is the substitution of competition for the mediaeval regulations which had previously controlled the production and distribution of wealth….Competition came to be believed in as a gospel.” (Toynbee.)
    Give illustrations of the substitution of competition, and state why, in your opinion, the good rather than the evil of competition was emphasized at this period.
    (b) Toynbee said: “The effects of the industrial revolution prove that free competition may produce wealth without producing well-being.” A Boston reformer, speaking of the advent of machinery, says, “The profits from the machine were absorbed by capital,” so that the people did not have their share. Does the economic history of the nineteenth century support these views?
  2. (a) Trace concisely the influence of agricultural interests upon the tariff history of England, France and Germany in the nineteenth century.
    (b) Has England been more affected by the agricultural depression of the last thirty years than other European countries? Why has it not been more influenced by the “protectionist reaction?”
  3. How has the French railroad policy differed from that of Prussia? Which has been the more beneficial? Give reasons.
  4. Do the actual conditions warrant the assertions concerning “the ominous situation of British trade?” Give reasons.
  5. State succinctly the chief facts concerning:—
    (a) Assignats.
    (b) British shipping subsidies.
    (c) Crisis of 1857.

Source: Harvard University Archives, Examination papers, Mid-years (HUC 7000.55). Box 8, Examination Papers, Mid-years, 1910-11.

cf. Final exam. First term, 1914-15.
Economics 2a.

European Industry and Commerce in the Nineteenth Century.

_____________________

Reading list: Second term, 1910-11.
Economics 6b.

Economic and Financial History of the United States.

 

Final exam: Second term, 1910-11.
Economics 6b.

[Economic and Financial History of the United States]

  1. Outline fully the topics you would discuss if you were to write a thesis on the history of the iron and steel industry in the United States.
  2. Comment on the following:—
    1. “We import annually millions of dollars’ worth of tropical products that could be grown in the United States.” (Report of Secretary of Agriculture for 1901.)
    2. “The sum paid by American producers and manufacturers to these foreign bottoms during the past year was $500,000,000, a sum sufficient to dig the Panama Canal and operate it for twenty years. Remember that all this good American money has gone into the pockets of foreigners.” (Admiral Evans in a recent magazine article.)
  3. (a) Outline our tariff history since 1890.
    (b) Comment on Senator Aldrich’s statement: “I do not believe there are any duties levied in this bill [the tariff act of 1909] that are excessive or are prohibitory.”
    (c) The American experience with reciprocity. Are you in favor of the reciprocity treaty with Canada? State your reasons.
  4. Rhodes in his history of the United States says: “This tendency [the accumulation of large fortunes and the development of abject poverty] had begun before the War and has been the result rather of the constantly deteriorating character of the European immigration than of industrial changes on our own soil.”
    Do you agree with this view? Give your reasons.
  5. Comment on the following: “The year 1896 was in fact one of those periods rare in the history of any country of which it could be said that a given chapter had definitely closed and that another was about to open.”
  6. Compare briefly the conditions before and after the Civil War in respect to
    1. The defects of our banking system;
    2. The public land policy;
    3. Governmental assistance to and control of transportation enterprise.

Source: Papers set for Final Examinations in History, Government, Economics, …, Landscape Architecture, Music in Harvard College. June 1911, p. 44. In Harvard University Archives, Examination papers, 1873-1915 (HUC 7000.25). Box 9. Examination Papers, 1910-11.

cf. Final Exam. Second term, 1914-15.

Economics 2b
Economic and Financial History of the United States.

Image Source: Edwin Francis Gay and Julius Klein, respectively, from The World’s Work, Vol. XXVII, No. 5 (March 1914) and Harvard Album 1920.