Category: Exam Questions

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Exam Questions M.I.T.

M.I.T. Final exam for business cycles course taught by Paul Samuelson, 1943

 

The following exam questions come from the carbon paper copy in Paul Samuelson’s papers. Transcribed below are the final exam questions for his course on business cycles taught during the second term of the 1942/43 academic year at M.I.T. The reading list for this course was transcribed and posted earlier. The next posting will provide the reading assignments and final examination for his course five years later.

______________________

Business Cycles
Ec 26 Examination
Thursday, May 20, 1943

Answer two or three questions not all from the same section.

I

  1. “The older economists regarded the trade cycle as a fluctuation around an undefined base. Modern economists have for the first time a theory of effective demand to determine that base.” Develop the last sentence, and weigh the accuracy of the whole quotation.
  2. Must savings equal investment? Discuss this problem, giving as little weight as possible to terminological and definitional matters. Go to the heart of the matter, and show how hoarding enters the picture if at all.
  3. What is the optimum amount of money in a system; the optimum marginal efficiency of capital; the optimum marginal propensity to consume? Explain.
  4. How can those who have lost faith in monetary control have so much confidence in the efficacy of fiscal policy?

 

II

  1. What is the effect on prices and wages of greatly increased effective demand? Illustrate with the policy problems raised during a war.
  2. Weigh the chances for boom and depression in the half decade after the war.
  3. Resolved: Secular stagnation is likely if not inevitable. Prepare a brief for the affirmative and for the negative.
  4. Discuss the problems raised by the public debt.

 

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Paul A. Samuelson Papers: Box 33, Folder “14.451 Business Cycles, 1943-1955”.

Image Source: From the slideshow at the MIT Memorial Service for Paul A. Samuelson held on April 10, 2010.

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Exam Questions Harvard Suggested Reading Syllabus

Harvard. Graduate Core Economic Theory, Readings and Exams. Schumpeter, 1936-37

 

The reading lists and exams for Schumpeter’s graduate economic theory course in 1935-36 have been posted earlier (the year Paul Samuelson took the course). It is worth noting that Keynes and the General Theory (at least Chapters 11, 13-16) were added to the readings for the second term of 1936-37.

__________________________

Course Announcement, 1936-37

Economics 101 (formerly 11). Economic Theory

Mon., Wed., Fri., at 2. Professor Schumpeter.

Source:  Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1936-37 (first edition). Official Register of Harvard University, Vol. XXXIII, No. 5 (March 2, 1936), p. 142.

__________________________

Course Enrollment, 1936-37

Primarily for Graduates:

[Economics] 101. (formerly 11). Professor Schumpeter.–Economic Theory.

Total 36:  30 Graduates, 3 Seniors, 3 Radcliffe.

Source: Harvard University. Report of the President of Harvard College for 1936-1937, p. 93.

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Economics 101

Following is a list of some of the most important works in English dealing with problems outside the range of perfect competition. They are not all assigned, but assigned reading is taken altogether from this list.

Pigou, A. C., Economics of Welfare, 3rd Edition.
Chamberlin, E. H., The Theory of Monopolistic Competition.
Chamberlin, E. H., On Imperfect Competition, in the March, 1934 Supplement of The American Economic Review, pp. 23-27.
Robinson, Joan, Economics of Imperfect Competition.
Robinson, Joan, What is Perfect Competition, Q. J. E., Nov. 1934.
Zeuthen, F., Problems of Monopoly and Economic Warfare.
Cournot, A. A., Mathematical Principles of the Theory of Wealth.
Edgeworth, F. Y., The Pure Theory of Monopoly (Papers, Vol. I)
Hotelling, Harold, Stability in Competition, E. J., March 1929.
Shove, G. F., The Imperfection of the Market, E. J., March 1933.
Harrod, R. F., Doctrines of Imperfect Competition, Q. J. E., May 1934.
Hicks, J. R., The Theory of Monopoly, Econometrica, Jan. 1935.

The subjects, in the order in which they will be taken up, together with the assigned reading, are given below.

I.  The Technique and the Background.

Pigou, Part II, Ch. XIV.
Robinson, Chs. 1, 2.
Chamberlin, Chs. 1, 2.

  

V. Monopolistic Competition

Chamberlin, Chs. 4, 5, 6, 7.
Robinson, Ch. 7. Q.J.E., Nov. ‘34
Shove, E.J., March ’33.
Harrod, Q.J.E., May ’34.
II.  Simple Monopoly.

Pigou, Part II, Ch. XVI.
Robinson, Chs. 3, 4, 5.

 VI. Discrimination.

Pigou, Chs. XVII, XVIII (Part II).
Robinson, Chs. 15, 16.
III.  Duopoly and Oligopoly

Pigou, Part II, Ch. XV.
Chamberlin, Ch. 3.

  
IV. Bilateral Monopoly.

Hicks, Sect. 3.

  

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

__________________________

[Hand-written notes, neat, presumably to be typed]

  1. On Substitution

Marshall, V., Chs. 4, 8; VI, Ch.1.
Hicks, Theory of Wages, Ch. 6.
Robinson, Imperfect Competition, Ch. 22.
Machlup, “Commonsense of the Elast. of Subst.”, Rev. Econ. Stud., Vol II, No. 3. (on Econ. 1 shelf)

More Advanced

Hicks, Appendix.
Various notes on elast. of subs. In Vols I and II, Rev. Econ. Stud., by Hicks, Lerner, Kahn, Tarshis etc.
Hicks, Rev. Econ. Stud. Oct., 1936.
Pigou, Econ. Journal, June, 1934.

  1. On Period of Production

Böhm-Bawerk, E., Positive Theory of Capital, Bk II, Ch. 2, 3.
Knight, F. H., “Capital, Time + the Interest Rate,” Economica, August 1934 (on Econ. 151 shelf)
Hayek, F. A., Q. J. E., Feb., ‘36
Machlup, F. “Professor Knight + the Period of Production,” J. P. E., Oct. 1935.

More Advanced

Gifford, C.H.P., Econometrica, April 1935 (in Econ. 102 shelf).

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

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1936-37
HARVARD UNIVERSITY
ECONOMICS 101

(Answer any FIVE questions)

  1. What meaning can be attributed to
    1. Positively inclined demand curves?
    2. Negatively inclined long-run average cost curves?
  2. Define arc elasticity of demand and explain the usefulness or otherwise of the concept.
  3. From given demand curves for consumers’ goods we derive demand curves for the producers’ goods or factors of production. From these in turn we derive the prices of factors and hence incomes. And these incomes determine the demand curves for consumers’ goods. Does this involve circular reasoning?
  4. Why is the explanation of market price by means of the theory of marginal utility superior to the explanation of market price by means of the Ricardian theory of quantity of labor?
  5. Consider a commodity A which is the product of two factors of production B and C. Then “an increase in the supply of A raises the demand for B in terms of money if the elasticity of the demand for A is greater than the elasticity of substitution.” Prove.
  6. Show why and in what sense price is determinate in the case of bilateral monopoly.
  7. “Perfect competition exists to such a negligible extent in the modern economy that all theorizing based on this assumption must be regarded as sheer waste of time.” What have you to say to this?
  8. “The key to problems of imperfect competition lies in the conditions of demand. But it is precisely when we come to problems of imperfect competition that the ordinary demand curve apparatus ceases to have any clear meaning.” Comment.

Mid-Year. 1937.

 

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

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ECONOMICS 101 [“37” is handwritten here]

The first month of the second term will be devoted to a study of the principles underlying the theory of distribution, with special emphasis on wages.

  1. Substitution and Relative Shares
    1. Hicks, J. R., The Theory of Wages, Ch. VI.
    2. Machlup, Fritz, “The Common Sense of the Elasticity of Substitution”, Review of Economic Studies, June, 1935.
    3. Hicks, J. R., “Distribution and Economic Progress: A Revised Version”, Review of Economic Studies, October, 1936.
    4. Also notes and articles on substitution and relative shares in Review of Economic Studies, Vol. I, Nos. 1 and 2, though not required reading, may be consulted.
  2. Theory of Wages and Marginal Productivity
    1. Marshall, Bk. VI, especially Ch. I.
    2. Hicks, J. R., Theory of Wages, Ch. I.
    3. ——-, Marginal Productivity and the Principle of Variation,” Economica, February, 1932.
    4. Schultz, Henry and Hicks, J. R., “Marginal Productivity and the Lausanne School: “A Reply” and “A Rejoinder”, Economica, August, 1932.
    5. Robertson, D. H., “Wage Grumbles” in the volume of essays entitled Economic Fragments.
    6. Chamberlin, E. H., On distribution under Imperfect Competition, pp. 23-27 of the Supplement to the American Economic Review, March, 1934.

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

__________________________

 ECONOMICS 101

            The next two or three weeks will be devoted to the discussion of capital and interest. A select bibliography and the assigned reading are listed below.

BIBLIOGRAPHY

  1. Böhm-Bawerk, E., Capital and Interest (a history of interest theories) [: and] The Positive Theory of Capital (the third edition, available only in German, containing the polemical Excursi, is to be preferred to the English translation)
  2. Marx, Karl, Capital (especially Vol. I, Parts III and VII; Vol. II, Part III; Vol. III, Parts II and III)
  3. Wicksell, Knut, Über Wert, Kapital und Rente [, and] Lectures on Political Economy, Vol. I
  4. Fisher, Irving, The Rate of Interest (1907) [; and] The Theory of Interest (1930) (a rewriting of the earlier work)
  5. Taussig, F.W., Wages and Capital
  6. Knight, F.H., “Interest”, article in The Encyc. of Soc. Science
  7. For a rather complete list of the numerous recent articles on capital, interest and the structure of production, Cf. Machlup, Fritz, “Professor Knight and the Period of Production”, Journal of Political Economy, 1935, first footnote.
  8. For an exposition of Böhm-Bawerk, Wicksell and the later work along the same lines done in Sweden, particularly by Gustav Akerman, Cf. Kirchmann, Hans, Studien zur Grenzproduktivitätstheorie des Kapitalzinses.
  9. Keynes, J. M., General Theory of Employment, Interest, and Money.

ASSIGNED READING

  1. Fisher, The Rate of Interest, Part I, Chs. 1,2,3; Part III, Ch. 10
  2. Böhm-Bawerk, Positive Theory, Book I, Ch. 2; Book II, Chs. 2,4,5; Book V, Chs. 1,2,3,4,5; Book VI, Chs. 5,6,7; Book VII, Chs. 1,2,3.
  3. Wicksell, Lectures, Vol. I, pp. 144-171; 185-195.
  4. Keynes, J. M., General Theory of Employment, Interest, and Money, 11, 13, 14, 15, 16.

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

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1936-37
HARVARD UNIVERSITY
ECONOMICS 101

Answer FIVE questions. Arrange your answers in the order of the questions.

  1. Saving, by increasing the quantity of capital, will tend to increase its absolute and relative share. At the same time saving will tend to reduce the rate of interest and thereby to decrease capital’s absolute and relative share. State the conditions on which the net effect of saving on the absolute and relative share will depend. What do you think the actual effect is in practice?
  2. Classical economists spoke of a net benefit accruing from free trade. Have we any means to measure that benefit and to determine how it is divided between the trading nations?
  3. Which of the theories of interest which you have studied seems to you most acceptable and why?
  4. What warrant is there for the statement that in perfect competition and perfect equilibrium every firm will produce that quantity which corresponds to the point of minimum average cost?
  5. Discuss the problem of inequality of incomes from the following points of view: (a) measurement, (b) economic effects, (c) relation to welfare.
  6. Could unemployment exist with perfect competition?
  7. What do you regard as the most desirable railroad rate policy? State clearly and justify your criteria of desirability, and show how the policy selected meets these criteria.

Final. 1937.

 

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

Image Source: Harvard University Archives. HUGBS 276.90p(43) Irving Fisher and J. A. Schumpeter (May 12, 1934).

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Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Economic Growth and Fluctuations. Readings and Midterm Exam. Solow, 1966

 

The readings for the second term MIT graduate core course in macroeconomics “Economic Growth and Fluctuations” was taught by Robert Solow in 1966. The reading list and midterm questions transcribed for this posting come from his papers at the Duke Economists’ Papers Archive. Solow was indeed listed for this course in the internal report “Department of Economics, Teaching Responsibilities” dated March 4, 1966 in Box 3 of the Department of Economics Papers in the M.I.T. archives.

The first term course that academic year was taught by Evsey D. Domar. His 14-page reading list (!) together with the midterm and final examinations have been transcribed and posted as well.

________________________

Spring 1966

READING LIST          14.452

I. Economic Growth

  1. Stylized Facts

Kendrick and Sato, “Factor Prices, Productivity and Growth”, AER, December 1963.
Bureau of the Census, Long-Term Economic Trends (This is a compendium of data. Spend an hour or two leafing through it.)

  1. Aggregative Models

Hahn and Matthews, “The Theory of Economic Growth: A Survey”, Economic Journal, December 1964, Parts I, II, IV.
Modigliani, “Comment” in Behavior of Income Shares (NBER), pp. 39-50.
Tobin, “Money and Economic Growth”, Econometrica, October 1965.
Marty, “The Neoclassical Theorem”, AER, December 1964.
Diamond, “National Debt in a Neoclassical Growth Model”, AER, December 1965, pp. 1126-1135 only. Rest optional.
Findlay, “The Robinsonian Model…”, Economica, February 1963 and comments by Robinson and Findlay in Economica, November 1963.

  1. Sources of Potential Output

Nelson, “Aggregate Production Functions” AER, September 1964
Denison, Sources of Economic Growth in the U.S. (Don’t read every word, but try to grasp content.)
Abramovitz, “Review of Denison”, AER, September 1962.
Phelps, “The New View of Investment”, QJE, November 1962.
David and van de Kliendert, “Biased Efficiency Growth in the U.S.”, AER, June 1965.

II. Short-Run Macrodynamics

  1. Short-Run Movements in Productivity

Brechling: “The Relationship between Output and Employment…”, Review of Economic Studies, July 1965
Kuh, “Cyclical and Secular Labor Productivity…”, Review of Economics and Statistics, February 1965
Wilson and Eckstein, “Short-Run Productivity Behavior…”, Review of Economics and Statistics, February 1964.

  1. Measuring Potential Output and the Gap

Thurow & Taylor, “The Interaction between Actual and Potential Rates of Growth in the U.S. Economy”, Mimeo.
Kuh, “The Measurement of Potential Output”, mimeo.

  1. Cycles and Fluctuations

Samuelson, “Interaction between Multiplier Analysis and the Principle of Acceleration”, Review of Economics and Statistics, 1939, reprinted in AEA, Readings in Business Cycle Theory.
Metzler, “The Nature and Stability of Inventory Cycles”, Review of Economics and Statistics, 1941.
Kaldor, “A Model of the Trade Cycle”, EJ 1940, reprinted in Hansen and Clemence, Readings in Business Cycles and National Income.
DeLeeuw, “The Demand for Capital Goods by Manufacturers”, Econometrica, July 1962.
Eckstein, “Manufacturing Investment and Business Expectations”, Econometrica, April 1965.
Jorgenson, “Anticipations and Investment Behavior”, Ch. 2 in The Brookings Quarterly Econometric Model of the U.S., (optional).
Darling and Lovell, “Factors Influencing Investment in Inventories”, Ch. 4 in The Brookings Quarterly Econometric Model of the U.S.
Okun, Effects of the Tax Cut of 1964. To appear or else mimeo. [handwritten addition]

  1. Integration of Growth & Effective Demand [handwritten addition, no items listed]

________________________

First Examination     14.452           April 13, 1966

  1. Imagine a one-sector economy, satisfying all the standard simplifying assumptions, in a steady state with constant saving ratio, constant rate of population growth, and no technological change. Now let there be a sudden once-and-for-all shift in technology, with the property that output per man increases by 10% at each and every capital-per-man. There is no change in saving ratio or population growth.
    1. What happens along the full-employment path?
    2. In the new steady state, has capital per man increased by more or less than 10%? Has output per man increase by more or less than 10%?
    3. Describe roughly how the competitively imputed real wage, rate of interest, and relative distribution of income might differ between the new steady-state and the old. (You will not always be able to settle the direction of change.)
  2. In the same sort of economy, suppose that investment demand is such that businesses will quickly snap up all investment opportunities yielding at least some “target rate of return”, like 20%, but none yielding less. Discuss in terms of diagram or otherwise, whether the economy is likely to experience inadequate or excessive aggregate demand near the steady state. What effect would a sudden increase in the rate of population growth have (assuming that the saving ratio was not affected)?
  3. Denison has been described as a pessimist with respect to the possibility of raising the U.S. rate of growth through deliberate policy. Is that a fair description? If so, what are the main sources of his pessimism? What do you gather from Nelson, Abramovitz and Phelps on this subject?

 

Source: Duke University, David M. Rubenstein Library. Economists’ Papers Archives. Papers of Robert M. Solow, Box 67, Folder “Exams”.

Image Source: Robert M. Solow (undated). MIT Museum .

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Exam Questions Fields Harvard

Harvard. Money, Banking, and Crises. PhD General Exam, 1930s

 

While economics course examination questions are relatively abundant at Harvard, field examinations for Ph.D. candidates are not so common. The following is transcribed from a carbon-copy found in a departmental folder labeled “1935-37-38-42”.  Judging from the questions, I might have guessed the exam would have come earlier than the late 1930s. At least for now we’ll have to say “exact year unknown”.

________________

General Examination for the Ph.D. Degree.
Money, Banking, and Crises.

  1. Briefly compare the experience of France and the United States with bimetallism. What lessons can be drawn from the experience of the two countries?
  2. What factors worked in favor of, and what against, the successful operation of the Bland-Allison Act during the 80’s?
  3. Compare the general organization of banking in England with that in Germany. Which seems to you the stronger? Why?
  4. What features of the Canadian banking system affect the elasticity of note issue in that country? How elastic is the Canadian bank note issue? How has the note issue been affected by the “rest fund fad”? How do you account for the “rest fund fad”?
  5. Describe the use of call loans in banking in the United States. To what extent and for what reasons are such call loans made? Are they an element of strength or weakness in our system? Why!
  6. What is meant by a free gold market? Are the following such: (a) London; (b) Paris; (c) Berlin; (d) New York? In each case, why or why not?
  7. How will the rate of sterling exchange in New York be affected by: (a) a slump on the New York Stock Exchange; (b) low call money rates in New York; (c) a financial panic in the United States?
  8. What are the three best index numbers for the study of general prices since 1895 in England and the United States? What are the points of strength and weakness in each?
  9. Describe and criticize at length Professor Fisher’s plan for stabilizing or standardizing the gold dollar.

 

Source: Harvard University Archives. Department of Economics. Correspondence & Papers 1902-1950 (UAV.349.10), Box 23, Folder “Course Outlines 1935-37-38-42”.

 

 

 

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Exam Questions Harvard Suggested Reading Syllabus

Harvard. Galbraith’s Business Organization and Control. Syllabus and Exams. 1949-50

 

 

Materials for the undergraduate course “Business Organization and Control” taught by Sidney Alexander in 1948-49 has been transcribed and posted earlier. The course was taught the following year by John Kenneth Galbraith and others. Below you will find enrollment data followed by transcriptions of  the syllabi for both semesters along with the mid-year and final examinations for the course.

_______________________

 Course Enrollment

[Economics] 161 (formerly Economics 61a and 62b). Business Organization and Control. (Full Co.) Dr. Galbraith

(F) Total 179: 2 Graduates, 61 Seniors, 75 Juniors, 32 Sophomores, 1 Freshman, 8 Radcliffe.
(Sp) Total 160:  2 Graduates, 56 Seniors, 70 Juniors, 24 Sophomores,  7 Radcliffe, 1 Other.

Source: Harvard University. Report of the President of Harvard College and Reports of the Departments for 1949-59, p. 73.

_______________________

[Fall Term, 1949-50]

Economics 161
Business Organization and Control
Dr. Galbraith

Date

 Topic Lecturer

Reading
Sept. 28 Preview Galbraith Bain, Ch. 1,2 (omitting pp. 26-41), 4, 5, 6, 8.

TNEC No. 21, pp. 20-48, 113-121.
Sept. 30 Applied Theory of Markets Galbraith
Oct. 3

“

 Galbraith
Oct. 5

“

 Galbraith
Oct. 7 Section
Oct. 10 Section
Oct. 12 HOLIDAY
Oct. 14 Forms of Business Enterprise Gordon Guthmann & Dougall, Chapter 2
Oct. 17 24 The Corporation: Origin and Legal Characteristics Gordon Buchanan, Ch. 3; Berle & Means, Book II, Ch. 1; Dewing, Book I, Ch. 1-2.
Oct. 19 26

“

 Gordon
Oct. 21 28 Section
Oct. 24 31 Concentration & Market Organization: The Role and peration of the Large Corporation Galbraith Gordon, Chapters 2, 4, 5.
Berle and Means, Book I, Ch. 1;
Book IV, Chapters 1-4.
Oct. 26
Nov. 2

“

 Galbraith
Oct. 28
Nov. 4		 Section
Oct. 31
Nov. 7		 Concentration & Market Organization: Holding companies and interest groups Galbraith Purdy, Chapter 7. Structure of the American Economy, Part I, Appendix 13
Nov. 2
Nov. 9		 Concentration & Market Organization: Trade Associations Gordon TNEC No. 18, pp. 45-67
TNEC No. 21, pp. 234-258
Nov. 4

Nov. 11

 Section

 

Bain, Joe S., Pricing, Distribution, and Employment, 1948.

U.S., Temporary National Economic Committee Monographs:

No. 18, Trade Association Survey;
No. 21, Competition & Monopoly in American Industry.

Guthmann, H. G., & Dougall, H. E., Corporate Financial Policy, 1948.

Buchanan, N. S., The Economics of Corporate Enterprise.

Berle, A. A., & Means, G. C., The Modern Corporation and Private Property, 1932.

Dewing, A. S., Financial Policy of Corporations, 1941, 2-volume edition.

Gordon, R. A., Business Leadership in the Large Corporation, 1945.

Purdy, H. L., Lindahl, M.L., and Carter, W. A., Corporate Concentration & Public Policy, 1942.

U.S., National Resources Committee, Structure of the American Economy, Part I, “Basic Characteristics.

_______________________

[Fall Term (cont.), 1949-50]

Economics 161
Business Organization and Control
Messrs. Galbraith and Gordon

Topic

 Lecturer

Reading
November 14 Price Leadership and Market Sharing Gordon Burns, Ch. III (ex. pp. 118-140), and Ch. IV.
November 16 Patents and Trademarks Gordon T.N.E.C. Monograph No. 21, pp. 158-165; Edwards, pp. 216-248.
November 18 Section
November 21 Advertising Galbraith Burns, Ch. VIII
November 23 Price Discrimination Gordon Boulding, pp. 533-43
November 25 Section
November 28 Basing Point System—Exposition Galbraith Machlup, Ch. 1 (ex. Appendix) and Ch. 3;

Kaysen, “Basing Point Pricing and Public Policy”
November 30 Basing Point System—Consequences Kaysen
December 2 Section
December 5 Economic Norms of Public Policy Duesenberry Hansen, Fiscal Policy and Business Cycles, Ch. XV
December 7

“

 Duesenberry
December 9 Section Galbraith, Essay on Monopoly and Concentration of Economic Power in Ellis, Review of Contemporary Economics
December 12 Economic Norms of Public Policy Duesenberry
December 14 Promoting Competition: The Anti Trust Laws Gordon Purdy et al., Chs. 16, 17, 18 (omitting pp. 354-360), 20 (omitting pp. 393-401), 28;

Adelman, “Effective Competition and the Anti Trust Laws”;
Mason, “The Current Status of the Monopoly Problem in the United States
December 16 Section
December 19 Promoting Competition: The Anti Trust laws
December 22

“

 

Adelman, M. A., “Effective Competition and the Anti Trust Laws,” M.I.T., Publications in the Social Sciences, Series No. 1, Reprint from Harvard Law Review, Sept. 1948.

Boulding, Kenneth, Economic Analysis, Revised Edition.

Burns, A. F., The Decline of Competition, 1936.

Edwards, Corwin, Maintaining Competition, 1949.

Kaysen, Carl, “Basing Point Pricing and Public Policy,” Q.J.E., August, 1949, pp. 289-314.

Machlup, Fritz, The Basing Point System, 1949.

Mason, Edward S., “The Current Status of the Monopoly Problem in the U.S.,” Harvard Law Review, June, 1949, pp. 1265-1285.

Purdy, H. L., Lindahl, M. L., and Carter, W. A., Corporate Concentration & Public Policy, 1942.

U.S., T.N.E.C. Monograph No. 21, Competition and Monopoly in American Industry, 1940.

Hansen, Alvin, Fiscal Policy and Business Cycles, 1941, First Edition.

Ellis, Howard, Review of Contemporary Economics, 1948.

_______________________

Final Examination, Fall Term 1949-50

1949-50
HARVARD UNIVERSITY
ECONOMICS 161

I.
(one hour)

Required

  1. A book published a couple of years ago entitled The American Individual Enterprise System, has the following to say about “the meaning of competition”;

“How a seller chooses to exercise his freedom, as long as he is independent, does not furnish a test of competition. The only true test, and the basic distinguishing feature of competition, is whether there are at least two suppliers of a market who make independent decisions on the prices and conditions at which they will offer their goods and services.”

Using the word “competition” in this sense, the book’s authors stat that “competition serves the public in the following ways”:

“It tends to assure that goods and services will be produced and distributed at the lowest possible cost.
“It tends to assure that profits will be held to the minimum.
“It tends to assure that the energy and raw materials and productive capacity of the nation will be used for providing those goods and services which the public wants, and in proportion to the relative demands of the public.
“It assures freedom of opportunity. Anyone at any time, if he has the necessary capital, can enter any line of business he desires.”

Questions:

(a) Do you concur in this definition of competition? Why or why not?

(b) Would an economic system which is “competitive” in the sense of the above quotation necessarily produce the results which the authors mention? Consider in turn each of the “results” mentioned above. Be specific, and make certain that you explain each step in your reasoning.

 

II.
(Seventy-five minutes)

Answer any three of the five.

  1. Give a concise, clear explanation of the mechanics of a multiple-basing point pricing using graphs if you wish.
  2. Under what circumstances and why are business firms likely to prefer non-price to price competition? Define your terms precisely.
  3. In what ways may it be argued that the American patent system is a stimulus and in what ways a deterrent, to invention and to realized technical progress in American industry?
  4. What is price discrimination? Outline a set of conditions under which discriminatory pricing operates to the advantage of buyers.
  5. State definitely but concisely the way in which each of the following cases affected the development of antitrust law.

C. Knight Case
Standard Oil Case
U. S. Steel Case
Aluminum Case

III.
(Forty-five minutes)

Required.

  1. Schumpeter and Clark appear to agree in advocating (or condoning) certain restraints on competition. Develop fully and discuss the lines of argument by which they arrive at their respective conclusions.

 

Mid-Year. January 1950.

_______________________

[Spring Term, 1949-50]

Economics 161
Business Organization and Control
Professor Galbraith and Mr. Gordon

Subject

 Lecturer

Reading
Feb. 8 Promoting Competition: Cartel Policy Gordon Mason, Controlling World Trade, Ch. 1, 2.
Feb. 10 Promoting Competition: The Recent Antitrust Cases Gordon Oppenheim, Cases on Federal Antitrust Laws, Ch. 5.
Nicholls, “The Tobacco Case of 1946,” American Economic Review, May 1949, pp. 284-96.
Feb. 13 Regulating Competition: Retail Trade and Regulation Galbraith TNEC Monograph 35, pp. 5-14, 145-160.
Adelman, “The A & P Case,” Quarterly Journal of Economics, May 1949.
Feb. 15 Regulating Competition: Retail Trade and Regulation Galbraith
Feb. 17 Section
Feb. 20 Limiting Competition: Agriculture Galbraith Black, Parity, Parity, Parity, Ch. 5, 20, 21.
Schultz, Production and Welfare of Agriculture, Ch. 4, 5, 8, 9, 12, 13, 15.
Feb. 22 HOLIDAY
Feb. 24 Limiting Competition: Agriculture Galbraith
Feb. 27 Limiting Competition: Agriculture Galbraith
Mar. 1 Regulated Monopoly: The Public Utility Concept Gordon Lyon, Abramson et al, Government and Economic Life, Vol. II, Ch. 21.
Mar. 3 Section
Mar. 6 Regulated Monopoly: Power and Transport Gordon
Mar. 8 Regulated Monopoly: Power and Transport Gordon Locklin, Economics of Transportation, Ch. VIII, XV, XVI.
Mar. 10 Section
Mar. 13 Regulated Monopoly: Power and Transport Gordon
Mar. 15 Corporate Financial Structure Gordon Dewing, Financial Policy of Corporations, Bk. I, Ch. 4 to p. 83, Ch. 7, 8, 9 to p. 218, and pp. 230-42; Bk. III, Ch. 1, 2.
Merrill, Lynch, How to Read a Financial Report (entire pamphlet)
Mar. 17 Section
Mar. 20 Corporate Financial Structure Gordon
Mar. 22 Corporate Financial Structure Gordon
Mar. 24 Section
Mar. 27 Regulation of Securities and Markets Gordon Stein, Government and the Investor, Ch. 2, 3, 4, 6.
Mar. 29 Regulation of Securities and Markets Gordon
Mar. 31 Section
Recess from April 2 through 9
Apr. 10 Conservation: Forest Products Nixon Jensen, Lumber and Labor, Ch. 1,2.
Apr. 12 Conservation: Oil and Gas Manne Rostow, A National Policy for the Oil Industry, Ch. 1-9, 13-15.
Apr. 14 Section
Apr. 17 Conservation: Oil and Gas Manne
Apr. 19 HOLIDAY
Apr. 21 Public Development: Housing Galbraith Fortune Magazine: The Industry Capitalism Forgot, August 1947, & Editorial, September 1947.

TNEC Monograph #8, Towards More Housing, Ch. IV, V, IX.
Apr. 24 Public Development: Housing Galbraith
Apr. 26 Economic Mobilization Galbraith Galbraith, “The Disequilibrium System,” American Economic Review, 1947.

Johnson, G. G., Economic Stabilization Program.
Apr. 28 Section
May 1 Economic Mobilization Galbraith
May 3 Reconciliation of Policy Galbraith
May 5 Summary Galbraith
Reading Period begins May 8

 

Mason, Edward S., Controlling World Trade, 1946.

Oppenehim, S. C., Cases on Federal Antitrust Laws.

Nicholls, W. H., “The Tobacco Case of 1946” in American Economic Review, May 1949, pp. 284-96.

Lyon, Abramson, et al, Government and Economic Life 1940.

Dewing, Arthur S., Financial Policy of Corporations, 1941, 2-volume edition.

Merrill, Lynch, Pierce, Fenner, and Beane, How to Read a Financial Report (pamphlet).

Stein, Emanuel, Government and the Investor.

Locklin, D. Philip, Economics of Transportation, 1947.

TNEC Monograph #8, Toward More Housing.

TNEC Monograph #35, Large-Scale Organization in the Food Industries.

Adelman, M. A., “The A & P Case. A Study in Applied Economic Theory,” Quarterly Journal of Economics, Vol. LXIII, No. 2, May 1949.

Schultz, T. W., Production and Welfare of Agriculture, 1949.

Black, J. D., Parity, Parity, Parity, 1942.

Jensen, Vernon, Lumber and Labor.

Rostow, Eugene V., A National Policy for the Oil Industry, 1947.

Galbraith, J. K., “The Disequilibrium System,” American Economic Review, Vol. XXXVII, #3, June 1947.

Fortune Magazine, “The Industry Capitalism Forgot,” August 1947, “Editorial,” September 1947.

Johnson, G. G., Suggestions for the Development of an Economic Stabilization Program for a War Emergency, National Security Resources Board, Document 47.

_______________________

Economics 161
[Midterm] Examination
April, 1950

  1. Retailing and agriculture are both industries composed of many small firms. What are the similarities in government policy toward these industries? What are the important differences?
  2. What were the principal provisions of the Securities Exchange Act of 1934? Discuss briefly in light of the abuses they were designed to remedy.

_______________________

Spring Term, Final Examination

1949-50
HARVARD UNIVERSITY
ECONOMICS 161

I.
(Forty-five minutes)

Required

  1. The special appeals court, which heard the Alcoa case in 1945, said that Congress, in passing the federal antitrust laws, “was not necessarily actuated by economic motives alone.” “It is possible,” the court said, “because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few.”

Does this point of view seem to you to provide a persuasive argument for the fair trade laws, Robinson-Patman Act and the position of the government in the A & P cases? Explain.

II.
(Ninety minutes)

Answer three out of four.

  1. Explain the importance of the following in relation to public regulation of the petroleum industry:
    1. The rule of capture.
    2. The Connally “Hot Oil” Act.
    3. The Interstate Compact.
    4. Marginal well Acts.
    5. Compulsory unit operation.
  2. What are the Acts of Congress administered by the Securities and Exchange Commission? Outline the principal provisions of any three of them and the ends they were designed to achieve.
  3. Under what circumstances do you believe a certificate of convenience and necessity should be required for entry into a business? What industries would you add (or delete) from a list where such certificates are required and why?
  4. “The pricing system is not an appropriate means for stabilizing income from farming over time. To place this burden on the pricing system, as has been done in recent years can only reduce greatly its capacity [for allocating resources between alternative employments in agriculture and between agricultural and non-agricultural enterprise].”

What is the general character of the legislation “of recent years” to which Professor Schultz refers? Do you agree that it has inhibited resource allocation? Does the same objection hold for the Brannan Plan?

III.
(Forty-five minutes)

Required.

  1. Before signing or vetoing important legislation, the President customarily requests the Bureau of the Budget—or occasionally some other Executive department or agency—to prepare a confidential memorandum setting forth the main features of the proposed legislation, the principal groups favoring and opposing it together with their arguments and motives, a careful statement of the economic consequences of the legislation; and the recommendation to the President, properly defended, as to whether he should accept or veto the legislation.
    Would you prepare such a memorandum on the amendments to the Natural Gas Act of 1938 (the Kerr Bill), as passed by the Eighty-first Congress and keeping in mind the following:

    1. That you are asked to pass only on the economic questions posed by the legislation. You are at liberty to ignore any purely legal issues that may have been involved.
    2. That your concern is solely with the public welfare. You may ignore any political problems which the legislation poses for the President or his party.
    3. That the President is a busy man and should not be burdened with an unnecessarily long-winded discourse.

(The quality of your memorandum and its economic analysis and argument, not the particular recommendation you make, will be the guiding factor in marking your paper.)

Final. May 1950.

 

Source: John F. Kennedy Presidential Library, Papers of John Kenneth Galbraith. Box 519, Folder “Economics 161, 1949-50.”

Image: John Kenneth Galbraith in Harvard Class Album 1952.

Categories
Exam Questions Harvard Suggested Reading Syllabus

Harvard. Graduate Money and Banking, Reading List, Final Exam. Williams and Goodwin, 1947

 

Today’s post is the second of three devoted to the year long graduate sequence “Principles of Money and Banking” taught by Alvin H. Hansen, John H. Williams, and Richard M. Goodwin (second semester) at Harvard in 1946-47.

The reading list for Econ 141b is transcribed below, along with the corresponding final examination questions. The previous post provided  transcriptions for the first semester’s list of readings and final examination (Econ 141a) and course enrollments in each semester. The next post will have the “General Reference Reading” list for both semesters.

____________________________

SECOND SEMESTER
ECONOMICS 141b: PRINCIPLES OF MONEY AND BANKING

III. International Monetary Equilibrium:

  1. Cassel, G., The Downfall of the Gold Standard (1936).
  2. Copland, Douglas, Australia in the World Crisis (1934).
  3. Ellis, H. S., Exchange Control in Central Europe (1941).
  4. Graham and Whittlesey, Golden Avalanche (1939).
  5. Hall, M. F., The Exchange Equalization Account (1935).
  6. Hahn, George, International Monetary Cooperation (1945).
  7. Hansen, Alvin, H., America’s Role in the World Economy (1945).
  8. Hardy, C. O., Is There Enough Gold (1936).
  9. Harris, S. E., Exchange Depreciation (1936).
  10. Harris, S.E., Economic Problems of Latin America (1944).
  11. Iverson, Carl, International Capital Movements (1936).
  12. Kindelberger, C. P., International Short-term Capital Movements (1937).
  13. League of Nations: Final Report on Gold (1932).
  14. League of Nations: Economic Fluctuations in the United States and the United Kingdom, 1918-22 (1942).
  15. Nurkse, R., International Currency Experience (1944).
  16. Warren and Pearson: (a) Gold and Prices (1935);
    (b) World Prices and the Building Industry (1937).
  17. Williams, John H., Postwar Monetary Plans (Second Edition, 1945)

IV. Monetary and Fiscal Policy:

  1. Beveridge, Sir William, Full Employment in a Free Society (1945).
  2. British White Paper on “Employment Policy” (1944).
  3. de Chazeau, Hart, and Others, Jobs and Markets (1946).
  4. Economics of Full Employment. Six Oxford Economists (1945).
  5. Fellner, W., Monetary Policies and Full Employment (1946).
  6. Financing American Prosperity, Twentieth Century Fund (1945).
  7. Groves, H. M.: (a) Production, Jobs and Taxes (1944).
    (b) Postwar Taxation and Economic Progress (1946).
  8. Hansen, Alvin, H., Economic Policy and Full Employment (1946).
  9. Harris, S. E., Postwar Economic Problems (1943).
  10. Harris, S. E., Economic Reconstruction (1945).
  11. Hayes, H. Gordon, Spending, Saving and Employment (1945).
  12. League of Nations: Anti-Depression Policy (1945).
  13. Langum, John K., Postwar Banking Problems (1946).
  14. Postwar Economic Studies No. 3, Public Finance and Full Employment (1945).
  15. Postwar Economic Studies No. 8, Federal Reserve Policy (1946).
  16. Ruml and Sonne, Fiscal and Monetary Policy (1944).
  17. Terborgh, George, The Bogey of Economic Maturity (1945).
  18. Williams, John H. Postwar Monetary Plans (Second Edition, 1945), Chapters 4, 5.

 

Source: Harvard University Archives. Alvin Harvey Hansen Papers. Box 1 of Lecture Notes and Other Course Material, Folder “Econs 141”. Also found in Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1) Box 4, Folder “Economics, 1946-47 (2 of 2)”.

____________________________

1946-47
HARVARD UNIVERSITY
ECONOMICS 141b

PRINCIPLES OF MONEY AND BANKING

(Three hours)

Discuss one question in each part.

I

  1. Your own appraisal of Keynes’ “General Theory.”
  2. The consumption function as a guide to monetary and fiscal policy.

 

II

  1. The treatment of the interest rate in modern monetary theory.
  2. Hayek’s criticism of the Foster and Catchings thesis.
  3. Hawtrey’s theory of the business cycle.

 

III

  1. The problem of international monetary and trade adjustment in the postwar world.
  2. One of the following:

(a) The International Monetary Fund;
(b) The International Bank for Reconstruction and development;
(c) The ITO Charter.

  1. Keynes’ paper on the “Balance of Payments of the United States,” Economic Journal, June, 1946.

 

Final. May, 1947.

 

Source: Harvard University Archives. Harvard University Final Examinations 1853-2001. Box 14. Papers Printed for Final Examinations: History, History of Religions…, Economics, … , Military Science, Naval Science, May, 1947.

Image Source: John H. Williams in Harvard Class Album, 1950.

 

Categories
Exam Questions Suggested Reading Syllabus

Harvard. Money and Banking graduate course, readings and exam. Hansen, 1946-47

 

 

Today’s post is the first of three devoted to the year long graduate sequence “Principles of Money and Banking” taught by Alvin H. Hansen, John H. Williams, and Richard M. Goodwin (second semester) at Harvard in 1946-47.

The reading list for Econ 141a is transcribed below, along with the corresponding final examination questions as well as enrollment numbers for both semesters.

Following posts will provide transcriptions for the following semester’s list of readings and final examination (Econ 141b) plus the “General Reference Reading” list for both semesters.

____________________________

Course Enrollment

[Economics] 141a. (fall term) Professors J. H. Williams and Hansen.—Principles of Money and Banking.

Total 130: 88 Graduates, 1 Senior, 26 Public Administration, 15 Radcliffe.

 

[Economics] 141b. (spring term) Professors J. H. Williams and Hansen and Assistant Professor Goodwin.—Principles of Money and Banking.

Total 113: 75 Graduates, 23 Public Administration, 15 Radcliffe.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1946-1947, p. 71.

____________________________

ECONOMICS 141
PRINCIPLES OF MONEY AND BANKING

 

Economics 141a — First Semester, 1946-47 (Professor Hansen)

  1. Central Banking: Current Problems and Policies
  2. Theory of Money, Liquidity-Preference, Interest and Prices

Economics 141b — Second Semester, 1946-47 (Professor Williams)

III. International Monetary Equilibrium

  1. Monetary and Fiscal Policy

 

 

READING LIST FOR ECONOMICS 141a
Principles of Money and Banking
1946-1947

Note: Pre-requisite reading (for those who are deficient in undergraduate preparation in Money and Banking:

  1. Banking Studies, Board of Governors, Federal Reserve System, (1941).
  2. Southard, F. A., Foreign Exchange Practice and Policy, (McGraw-Hill, 1940).
  3. Any one standard textbook in Money and Banking, such as: Thomas, Our Modern Banking and Monetary System, (Prentice-Hall, 1942); or Reed, Money, Currency and Banking, (McGraw-Hill, 1942).

 

I. Central Banking: Current Problems and Policies.

A. Minimum Reading List:

I. Books and Pamphlets:

  1. International Currency Experience (League of nations, 1944), Chapters I-IV, pp. 7-112.
  2. World Economic Survey, 1942-44 (League of Nations, 1945), Chapter IV “Finance and Banking” (pp. 173-213).
  3. Money and Banking: 1942-44 (League of Nations, 1945).
  4. Ellis, H. S., (in Harris: Economic Reconstruction, McGraw-Hill, 1945), Chapter 13, “Central and Commercial Banking in Postwar Finance” (pp. 237-252).
  5. Hansen, Alvin H., America’s Role in the World Economy (Norton, 1945), Chapter XVII, “Gold, Exports and Liquidity” (pp. 144-157).
  6. Harris, S. E., Inflation and the American Economy (McGraw-Hill, 1945), Chapter XXIV, “Money and Savings” (pp. 372-383).
  7. Hawtrey, R. G., The Art of Central Banking (Longmans, 1933) pp. 116-207.
  8. Keynes, J. M., Treatise on Money, Volume II, Chapters 25, 32, 33.
  9. Robertson, D. H., Essays in Monetary Theory (King, 1940), Chapter II, “Theories of Banking Policy” (pp. 39-59); Chapter XII, “British Monetary Policy” (pp. 154-167).
  10. Williams, John H., Postwar Monetary Plans (Knopf, second edition, 1945), Chapter 6, “The Banking Act of 1935” (pp. 112-129); Chapter 8, “The Crisis of the Gold Standard” (pp. 154-172); Chapter 9, “Monetary Stability and the Gold Standard” (pp. 172-190).
  11. Financing American Prosperity (Twentieth Century Fund, 1945):
    1. Ellis, H. S., “Monetary Controls and the Business of Banking” (pp. 140-153).
    2. Hansen, Alvin, H., “Management of the Debt and Internal Stability” (pp. 246-256).
    3. Williams, John H., “Money and Banking” (pp. 381-5).
  12. Postwar Economic Studies, No. 3 (Board of Governors, Federal Reserve System, 1945):
    1. Robinson, R. I., “Monetary Aspects of National Debt Policy” (pp. 69-83).
    2. Wallich, H. C., “Public Debt and Income Flow” (pp. 84-100).
    3. Hansen, Alvin H., “Comments” (pp. 131-5).

II. Reports and Articles:

  1. Annual Report of the Secretary of the Treasury on the State of the Finances:
    1. Fiscal year ended June 30, 1944 (pp. 1-10).
    2. Fiscal year ended June 30, 1945 (pp. 1-10).
  2. Federal Reserve Bulletins:
    1. May 1946 (pp. 461-8), “Treasury Financing and Banking Developments.”
    2. July 1946 (pp. 707-15), “Postwar Business Finance”.
    3. February 1946 (pp. 122-3), “Estimated Liquid Assets of Individuals and Business”.
  3. Bopp, K. R., “Central Banking at the Crossroads”, Supplement, American Economic Review, March 1944 (pp. 260-77).
  4. Hansen, Alvin H., “Inflation”, Yale Review, Summer 1946.
  5. Macmillan Report, Royal Commission on Industry and Commerce, Cmd. 3897 (1931), pp. 2-45; 106-160.
  6. Samuelson, Paul, “The Effect of Interest Rate Increases on the Banking System”, American Economic Review, March 1945.
  7. Seligman, H. L., “The Problem of Excessive Commercial Bank Earnings”, Quarterly Journal of Economics, May 1946.
  8. Whittlesey, C. R., “Federal Reserve Policy in Transition”, Quarterly Journal of Economics, May 1946.

B. Supplementary Reading List:

I. Books

  1. Arndt, H. W., The Economic Lessons of the Nineteen Thirties, (Oxford, 1944).
  2. Coulborn, W, A. L., An Introduction to Money, (Longmans, 1938) Chapters 5, 13-14 (pp. 48-64, 209-241).
  3. Fisher, Irving, 100 Per Cent Money, (Adelphi, 1935; Third Edition City Printing Co., New Haven, 1945).
  4. Johnson, G. G., The Treasury and Monetary Policy, (Harvard 1939), Chapter I-V (pp. 3-160).
  5. Hawtrey, R. G., The Gold Standard in Theory and Practice (Longmans, Fourth Edition, 1939).
  6. Hawtrey, R. G., A Century of Bank Rate. (Longmans, 1938).
  7. Lewinski, J., Money, Credit and Prices, (King, 1929) Chapters IV-V (pp. 99-144).
  8. McCracken, Paul W., The Future of Northwest Bank Deposits, Federal Reserve Bank, Minneapolis, 1946.
  9. Mints, L. W., A History of Banking Theory (Chicago, 1945), Chapters VI and X (pp. 74-100; 178-197).
  10. Morgan, E. V., The Theory and Practice of Central Banking, (Macmillan, 1943).
  11. Niebyl, Karl H., Studies in the Classical Theories of Money, (Columbia, 1946).
  12. Sayers, R. S., Modern Banking, (Oxford, 1938), Chapters 4-5 (pp. 70-145).
  13. Viner, J. Studies in the Theory of International Trade, (Harper, 1937), Chapter V, “English Currency Controversies” (pp. 218-289).
  14. Wernette, P., Financing Full Employment, (Harvard, 1945), Chapter 3 (pp. 33-61).

II. Articles

  1. Abbott, C. C. (Review articles on Financing Problems and Bank Liquidity), Review of Economic Statistics, February 1946 (pp. 48-51).
  2. Abbott, C. C., “Management of the Federal Debt”, Harvard Business Review, Autumn 1945.
  3. Goldenweiser, E. A., “Commercial Banking After the War”, Federal Reserve Bulletin, September 1944.
  4. Seltzer, Lawrence, “Is a Rise in Interest Rates Desirable or Inevitable?”, American Economic Review, December 1945.
  5. Treasury Bulletin, April 1946, “Federal War-time Financing and the Growth of Liquid Assets”.
  6. Keynes, J. M., “The Objective of International Price Stability”, Economic Journal, June-September 1943.

C. General Reference Reading (see below).

II. Theory of Money, Liquidity Preference, Interest and Prices.

A. Minimum Reading List:

I. Books:

  1. Haberler, G., Prosperity and Depression, (League of Nations, 1939), Chapters 8, 13, (pp. 168-254; 455-507).
  2. Hansen, Alvin H.:
    1. Fiscal Policy and Business Cycles, (Norton, 1941), Chapters 1-5; 11-15; (pp. 13-105; 225-338).
    2. Full Recovery or Stagnation, (Norton, 1938), Chapters 1-5 (pp. 13-133); Appendix, pp. 331-343.
  3. Hayek, F. A., Prices and Production, (Routledge, 1935), Chapters 1 and 4 (pp. 1-31; 105-128).
  4. Hicks, J. R., Value and Capital, (Oxford, 1939), Chapters 12-13 (pp. 153-170).
  5. Keynes, J. M., Monetary Reform, (Harcourt, 1924), pp. 81-95; 152-191.
  6. Keynes, J. M., A Treatise on Money, (Harcourt, 1930), Chapters 9-13 and 30 (Volume I, pp. 123-220; Volume II, pp. 148-208).
  7. Keynes, J. M., General Theory of Employment, Interest and Money, (Harcourt, 1936), pp. 3-45; 61-65; 74-221; 245-271; 292-332; 372-384.
  8. Lerner, A. P., The Economics of Control, (Macmillan, 1944), Chapters 22-25 (pp. 271-345).
  9. Marget, Arthur W., The Theory of Prices, Volume I, (Prentice-Hall, 1938), Chapters 12 and 15 (pp. 302-343, 414-459).
  10. Marget, Arthur W., The Theory of Prices, Volume II, (Prentice-Hall, 1942), Chapter 3 (pp. 89-133).
  11. Marshall, A., Official Papers, (Macmillan, 1926), pp. 19-31.
  12. Pigou, A. C., Lapses from Full Employment, (Macmillan, 1945), Chapters 1-5; 8-9; 12. (pp. 1-29; 38-51; 69-73).
  13. Robertson, D. H., Money, (Harcourt, 1929), chapters 2-4; 7-8 (pp. 18-91; 144-197).
  14. Robertson, D. H., Essays in Monetary Theory, (King, 1940), Chapters 1, 6, 11 (pp. 1-38; 92-7; 113-153).
  15. Schumpeter, J. A., Business Cycles, (McGraw-Hill, 1939), Volume II, Chapter 8, (pp. 449-482).
  16. Wicksell, K., Interest and Prices, (Macmillan, 1936), Introduction by Bertil Ohlin; also author’s Preface; Chapters 5, 7-8, 11 (pp. 38-50; 81-121; 165-177).
  17. Wicksell, K., Money: Lectures on Political Economy, Volume II, (Macmillan, 1935), Chapter IV (pp. 127-228).
  18. Wright, David McC., The Creation of Purchasing Power, (Harvard, 1939), Chapters 4-6 (pp. 60-121).
  19. Macmillan Report, Royal Commission on Finance and Industry, Cmd. 3897 (1931), Part I, Chapter 11.

II. Articles:

  1. Clark, Colin, “Public Finances and Changes in the Value of Money”, Economic Journal, December 1945.
  2. Hicks, J. R., “Mr. Keynes and the Classics: A Suggested Interpretation”, Econometrica, April 1937.
  3. Hawtrey, R. G. and Hicks, J. R., “Interest and Bank Rate”, The Manchester School of Economic and Social Studies, October 1939.
  4. Keynes, J. M., “Relative Movement of Real Wages and Output”, Economic Journal, March 1939.
  5. Lange, O., “The Rate of Interest and the Optimum Propensity to Consume”, Economica, February 1938.
  6. Lerner, A. P., “Alternative Formulations of the Theory of Interest”, Economic Journal, June 1938.
  7. Lerner, A. P., “Interest Theory: Supply and Demand for Loans or Supply and Demand for Cash”, Review of Economic Statistics, May 1944.
  8. Lerner, A. P., “Ex Ante Analysis and Wage Theory”, Economica, November 1939.
  9. Lerner, A. P., “Some Swedish Stepping Stones in Economic Theory”, Canadian Journal of Economics and Political Science, November 1940.
  10. Mints, Hansen, Ellis, Lerner, Kalecki, “A Symposium on Fiscal and Monetary Policy”, Review of Economic Statistics, May 1946.
  11. Modigliani, F., “Liquidity Preferences and the Theory of Interest and Money”, Econometrica, January 1944.
  12. Pigou, A. C., “Employment Policy and Sir William Beveridge”, Agenda, August 1944.
  13. Reder, M. W., “Interest and Employment”, Journal of Political Economy, June 1946.
  14. Simons, H. C., “Debt Policy and Banking Policy”, Review of Economic Statistics, May 1946.

B. Supplementary Reading List:

I. Books:

  1. Adarkar, B. P., The Theory of Monetary Policy, (King, 1935), Chapter 1-8; 13-15 (pp. 3-52; 101-122).
  2. Chandler, L. V., An Introduction to Monetary Theory (Harper, 1940), pp. 1-205.
  3. Coulborn, W. A. L., An Introduction to Money, (Longmans, 1938), Chapters 6-8; 15-16 (pp. 65-116; 242-264).
  4. Lindahl, Erik, Studies in the Theory of Money and Capital, (Allen and Unwin, 1939), Part II, Chapters 4-6, (pp. 199-268).
  5. Myrdal, Gunnar, Monetary Equilibrium, (Hodge, 1939), Chapters 1-3 (pp. 1-48).
  6. Polanyi, M. Full Employment and Free Trade, (Cambridge Univ. Press, 1945), Chapters 1, 4, (pp. 1-66; 87-103).
  7. Sayers, R. S., Modern Banking. (Oxford, 1938), Chapter 6 (pp. 146-164).
  8. Thomas, Brindley, Monetary Policy and Crises, (Routledge, 1936), Chapters 3-4 (pp. 62-156).

II. Articles:

  1. Lange, O., “Economic Controls After the War,” Political Science Quarterly, March 1945.
  2. Marschak, J., “Wicksell’s Two Interest Rates”, Social Research, November 1941.
  3. Simons, H. C., “On Debt Policy”, Journal of Political Economy, June 1945.
  4. Warburton, Clark, “The Volume of Money and the Price Level Between the World Wars”, Journal of Political Economy, June 1945.
  5. a. Warburton, Clark, “The Monetary Theory of Deficit Financing”, Review of Economic Statistics, May 1945.
    b. Arndt, H. W., “The Monetary Theory of Deficit Financing; A Comment”, Review of Economic Statistics, May 1946.

C. General Reference Reading (see below).

Source: Harvard University Archives. Alvin Harvey Hansen Papers. Box 1 of Lecture Notes and Other Course Material, Folder “Econs 141”. Also found in Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1) Box 4, Folder “Economics, 1946-47 (2 of 2)”.

____________________________

Mid-Year Final Examination

1946-47
HARVARD UNIVERSITY
ECONOMICS 141a

(Write on any THREE questions.)

    1. Give a thorough discussion of current monetary and banking problems including in your essay the following topics:
      1. The increase in the quantity of money in the U. S. since 1934; causes and effects.
      2. War-time financing; the role of the Federal Reserve Banks and of the commercial banks.
      3. Recent and prospective trends in interest rates; causes and effects.
      4. New proposals with respect to reserve requirements, composition of bank assets, and control of bank credit.
      5. Management of the public debt.
    1. Write an essay on Keynes’ theory of interest, explaining the significance and role of the marginal efficiency schedule, the consumption function, liquidity preference, and monetary policy. In connection with Keynes’ interest theory, discuss the ideas and contributions of Hicks, Lerner and Modigliani.
    2. Compare Fisher, Marshall (Cambridge cash-balance school), Wicksell and Keynes with respect to the role of the quantity of money in the theory of money and prices.
    3. Write an essay (about an hour) on any two of the following:
      1. Hayek: Prices and Production
      2. Keynes: A Treatise on Money; or General Theory of Employment, Interest and Money
      3. Marget: The Theory of Prices
      4. Robertson: Money; or Essays in Monetary Theory
      5. Wicksell: Money; or Interest and Prices
      6. Hansen: Fiscal Policy and Business Cycles; or Economic Policy and Full Employment

Final. January, 1947.

Source: Harvard University Archives. Harvard University Final Examinations 1853-2001. Box 13. Papers Printed for Final Examinations: History, History of Religions…, Economics, … , Military Science, Naval Science, January, 1947.

Image Source: Alvin Hansen from Harvard Class Album 1952.

Categories
Economists Exam Questions Gender Johns Hopkins

Johns Hopkins University. Economics Ph.D. Examination Questions for Gertrude Schroeder, 1947

 

From time to time in rummaging through folders in archival boxes, I come across a random artifact that is linked to a old professor of mine, a professional colleague or even a classmate  from graduate school. The Department of Political Economy at Johns Hopkins University wrote Ph.D. examination questions targeted to the individual candidate, as we see in the nine hours worth of examinations taken over two days by then 27 year old Gertrude Guyton Schroeder at the end of September 1947.

Gertrude Elsa Guyton was born in New Mexico February 20, 1920, married twice (first husband: William Schroeder, second husband Rush Varley Greenslade). According to her Washington Post obituary (below), she worked as an economist for the CIA from 1954 to 1969. From 1969 to 1993 she was a professor of economics at the University of Virginia. She died March 30, 2007, leaving an endowment of nearly $10 million to the University of Virginia for international studies (see below).

These 1947 examination questions are interesting as artifacts associated with one of the relatively small number of woman of her generation who pursued Ph.D. studies in economics. My professional connection to Gertrude Schroeder (as I knew her) was as the lead author of a comparative study of US and Soviet consumption à la International Comparison Project (Kravis, Heston and Summers):

Schroeder, Gertrude E. and Edwards, Imogene. 1981: Consumption in the USSR: An international comparison. Joint Economic Committee, US Congress. US Government Printing Office: Washington, DC., 1981.

The purchasing-power-parities published there along with the Soviet personal consumption statistics were an essential ingredient for the calculations in my paper for the Abram Bergson memorial issue, The ‘Welfare Standard’ and Soviet Consumers, Comparative Economic Studies, Vol. 47, issue 2, June 2005, pp. 333-345. I spoke to her only once or twice about her data, and she was indeed delighted that these data proved of use for empirical analysis nearly a quarter of century later.

I was unable to find a picture of Gertrude Schroeder Greenslade for this posting so I figured the quote from Brecht’s Threepenny Opera was appropriate for this former CIA analyst:(with apologies to Bertolt Brecht) “While some stand in the darkness and others stand in light, you see the latter clearly, the former hide in night.” 

________________________

AER Membership Listing, 1970

SCHROEDER, GERTRUDE E., academic, government; b. Albuquerque, N.M., 1920; B.A., Colo. State Coll., 1940; M.A., Johns Hopkins, 1948, Ph.D., 1953. DOC. DIS. The Growth of Major Basic Steel Companies, 1900-1950, 1952. FIELDS 2b, 9, 7d. PUB. The Growth of Major Basic Steel Companies, 1900-1950, 1954; “Industrial Labor Productivity,” JEC, Dimensions of Soviet Economic Power, 1962; “”Soviet Economic Reforms: A Study in Contradictions,” Soviet Studies, July 1968. RES. Soviet Wage Statistics and Real Wages. Economist, various U.S. Govt. Agencies, 1943-48; sr. economist, Dept. of Labor and Dept. of Health, Edn. and Welfare since 1950 [sic, cf. obituary below]; part-time tchg., U. Md. and American U., 1966-68. ADDRESS 3051 Porter St. NW., Washington DC 20008.

Source: Biographical Listings of Members, The American Economic Review, Vol. 59, No. 6 (Jan., 1970) p. 389.

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AER Membership Listing, 1974

SCHROEDER, GERTRUDE E., academic; b. Albuquerque, N.M., 1920; Educ. B.S., Colo. State Coll., 1936 [sic]; M.A., Johns Hopkins, 1948, Ph.D., 1953. Doc. Dis. The Growth of Major Basic Steel Companies, 1900-1950, 1952. Fields 050, 110, 800. Pub. “Consumer Problems in the Soviet Union”, Problems of Communism, 1973; “Recent Developments in Planning and Incentives in the Soviet Union”, Soviet Econ. Prospects for the seventies, 1973; “The Reform of the Indsl. Supply System in the USSR”, Soviet Studies, 1972. Res. A study of the Soviet fin. system. Prev. Pos. Sr. Econs., various U.S. Govt. Agencies, 1943-69; Cur. Pos. Prof. of Econs., U. of Va. since 1969. Address Univ. of Va., Dept. of Econs., Charlottesville, VA 22901.

Source: Directory of Members, The American Economic Review, Vol. 64, No. 5 (Oct., 1974) p. 359.

________________________

Obituary. Washington Post

Gertrude Greenslade, Economist

Gertrude Schroeder Greenslade, 87, an economist at the CIA and the University of Virginia, died of renal failure March 30 at Powhatan Nursing Home in Fairfax County. She lived in McLean.

Mrs. Greenslade was an employee of the Central Intelligence Agency from 1954 until 1969 and worked as a consultant to the CIA from 1993 until her death. She was a member of the faculty at the University of Virginia from 1969 until 1993, when she retired.

She was born in Albuquerque and graduated from Colorado State University. She received two degrees in economics from Johns Hopkins University, a master’s in 1948 and a doctorate in 1953.

Her specialty was the study of Soviet and Eastern European economies. Mrs. Greenslade was fluent in Russian and was a former president of both the Southern Conference on Slavic Studies and the Association for Comparative Economics.

Her first husband, William Schroeder, died in 1966. Her second husband, Rush V. Greenslade, died in 1978….

Source: Washington Post, April 12, 2007.

________________________

Gift to the University of Virginia

Professor emeritus Gertrude Schroeder Greenslade designated the University as the beneficiary of a revocable trust and two individual retirement accounts. Her gift of more than $7 million will support interdisciplinary international studies in the College and Graduate School of Arts & Sciences.

Source: The Cornerstone Society Report, 2007-2008.

 

Professor donates to international studies
University international studies centers benefit from $9.8 million endowment

By Virginia Terwilliger

The Center for South Asian Studies and the East Asia Center, along with several other international studies programs, recently received more than $386,000 to strengthen and elevate their programs for the 2009-10 school year, thanks to late Economics Prof. Gertrude Greenslade.

Prior to her death in March 2007, Greenslade arranged to leave $9.8 million in an endowment to the University’s international studies programs. Now, those funds are beginning to be distributed to various University beneficiaries, College Dean Meredith Woo said, adding that the terms of the endowment mandate that only 5 percent may be distributed immediately.

The money also will contribute to exchange programs between the University and the University of Rome, […end of webpage]

Source: The Cavalier Daily, October 12, 2009.

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COMPREHENSIVE EXAMINATION
POLITICAL ECONOMY
[Johns Hopkins University]

Gertrude Guyton Schroeder

Monday morning, Sept. 29 [1947]
Three hours

Answer 3

  1. Prepare an essay on the theory and measurement of productivity.
  2. Compare the development and behavior of American and European unionism.
  3. Analyze the theoretical and empirical relation between economic growth and fluctuation.
  4. Write a review of a book in economics that has appeared since World War II.

 

Monday afternoon, Sept. 29 [1947]
Three hours

Answer 3

  1. Develop the history of banking and of theory about banking; and indicate their relevance to present-day problems and policies.
  2. Explain the theory of interest; what it is, how it gets determined, and what is its significance for economic statics and dynamics. Do not neglect a review of its actual behavior.
  3. Compose a short article on the corporation—its history, legal status, its quantitative position, and its impact on the economy.
  4. What are the major tools of monetary and fiscal policy? Evaluate them.

 

Tuesday morning, Sept. 30 [1947]
Three hours

Answer 3

  1. Set forth the doctrine of comparative advantage using arithmetic models and explaining both the assumptions on which the doctrine rests and the limitations on the conclusion that may be drawn from it.
  2. Write for an hour on monopoly.
  3. Compare on all major points the theories of Alfred Marshall and J. M. Keynes. Show what both these synthesizers owe to earlier thinkers. What ideas of theirs, if any, have been rejected?
  4. In what sense may it be argued that the competitive allocation of resources is an optimum allocation?

 

Source: Johns Hopkins University, Ferdinand Hamburger, Jr. Archives. Department of Political Economy Series 5/6. Box 6/1, Folder “Comprehensive Exams for Ph.D. in Political Economy, 1947-65”.

 

 

Categories
Exam Questions Harvard

Harvard. Earliest Multiple Choice Exam for Principles of Economics, 1948

 

What makes the second semester  final examination for Principles of Economics at Harvard in 1947-48 particularly interesting is that we probably discover there the introduction (at least to Harvard’s economics department) of that  art form known as the multiple choice question. For the sake of completeness I have transcribed the first semester final examination as well. Coming up soon will be the course reading list for both semesters. I challenge readers to take the multiple choice exam and send me their answers. Perhaps someone out there will get a grant fat enough to allow administering the exams to a sample of current students! 

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1947-48
HARVARD UNIVERSITY

ECONOMICS Aa

 I.
(One hour and a half)

Answer BOTH questions

  1. Suppose that Congress approves a European Recovery Plan which would entail a $4 billion expenditure by the United States Government during the coming year. This expenditure could be financed by the sale of government bonds (a) to the public; (b) to the member banks; (c) to the Federal Reserve Banks; or by (d) taxation. Indicate the effects of each one of these alternative methods on (1) member bank reserves (2) the money supply. Illustrate b use of member bank and Federal Reserve Bank statements (balance sheets).
  2. Analyze and discuss “the process by which competition rations scarce goods, determines their values relative to each other…regulates the types and amounts of the goods and services produced, and encourages the use of the most efficient productive processes.” (Quoted from Chandler, p. 185)

II.
(One hour and a half)

Answer any THREE questions

  1. Given the following incomplete data for 1939 (rounded out to the nearest billion):

Government outlays inclusive of transfer payments………17
Corporate saving (i.e., undistributed profits)…………….……1
Total taxes…………………………………………………………………15
Gross private investment…………………………………………….10

which of the additional items listed below would be necessary in order to deduce separately,   1. Gross National Product, 2. Net National Product, 3. Personal savings.
List of additional items:

a. Total wages,
b. Total money supply at beginning of year,
c. Total money supply at end of year,
d. Net increase in inventories,
e. Consumption expenditures,
f. Depreciation,
g. Income velocity of money,
h. Transfer payments by government,
i. Net change in member bank reserves.

  1. How does the economist define profit? Why is this definition likey to differ from the concept of profit of the business man? What is the purpose of the eonomist’s definition?
  2. Analyze the effect on the price charged by a monopolist for his product of THREE of the following:
    1. A rise in the cost of labor,
    2. A percentage tax on his profits,
    3. A tax on the value of his plant and equipment,
    4. The appearance on the market of a high priced rival substitute for his product.
  3. Discuss the advantages and disadvantages of attempts to use anti-trust laws to restore competitive conditions in large scale industries.

Final. January, 1948.

 

Source: Harvard University Faculty of Arts and Sciences. Papers Printed for Final Examinations: History, History of Religions,…,Economics,…Military Science, Naval Science. January, 1948. Harvard University Archives, Harvard Final Examinations, 1853-2001. Box 15 of 284.

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HARVARD UNIVERSITY
THIS EXAMINATION PAPER MUST BE RETURNED TO THE PROCTOR

ECONOMICS Ab
May 17, 1948

 

The total time allowed for the three objective parts of the Examination is eighty-five (85) minutes. At the end of that time, these three objective parts of the examination will be collected.
Read carefully the instructions for marking the answer sheets.
Do not write on this paper. Use the scratch paper provided.

 

PART I

Indicate on the separate sheet the one best answer to each of the following questions. For each correctly marked answer, credit is given. For each incorrectly marked answer, credit is taken away. For each question no answered, credit is neither given nor taken away.
Allow approximately twenty (20) minutes for this part of the exam.

A vineyard produces only one output, burgundy wine, with only two inputs, unskilled agricultural labor and ten acres of land planted in grapes. The firm hires labor on a day-to-day basis, and can freely vary the quantity hired; the market for labor is purely competitive. The firm rents the land from its real owner, and has a two-year lease obligating it to pay a fixed monthly rental; moreover, it cannot increase or decrease the quantity of land which it can rent in less than two years. The price of burgundy wine is fixed by a trade association, and does not change during the entire period considered in this problem. The firm is in complete equilibrium, with optimum adjustment of inputs (land and labor) and output (burgundy wine) for maximum profit.
Now, the wage which must be paid for labor falls. There are no changes in the economy other than this fall in wages and its effects. In the firm’s new short-run equilibrium, compared to the original situation:

      1. The schedule of the marginal revenue productivity of labor to the firm
        1. is raised.
        2. is lowered.
        3. is not shifted.
        4. Its behavior is indeterminate with the information given.
      2. The schedule of the marginal cost of labor to the firm
        1. is raised.
        2. is lowered.
        3. is not shifted.
        4. Its behavior is indeterminate with the information given.
      3. The quantity of labor hired by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      4. The marginal revenue productivity of labor for the quantity now hired by the firm, compared to the marginal revenue productivity for the quantity hired in the original situation
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      5. The total payment made to labor by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      6. The output of burgundy wine produced by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      7. The profit of the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.

After many years pass, in the firm’s new long-run equilibrium, compared to the original situation:

      1. The quantity of land rented by the firm for any particular output of burgundy wine produced
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      2. The quantity of labor hired by the firm for any particular output of burgundy wine produced
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      3. The schedule of the marginal revenue productivity of labor to the firm
        1. is raised.
        2. is lowered.
        3. is not shifted.
        4. Its behavior is indeterminate with the information given.
      4. The output of burgundy wine produced by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      5. The quantity of land rented by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      6. The quantity of labor hired by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      7. The rental per acre on the land rented by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.
      8. The total rent payment to the owner of the land by the firm
        1. is increased.
        2. is decreased.
        3. is not changed.
        4. Its behavior is indeterminate with the information given.

 

 

PART II

Indicate on the separate answer sheet the one best answer to each of the following questions. For each correctly marked answer, credit is given. For each incorrectly marked answer, credit is taken away. For each question not answered, credit is neither given nor taken away.
Allow approximately forty-five (45) minutes for this part of the exam.

      1. A tax is proportional if
        1. the tax rate increases as the tax base increases.
        2. the tax rate decreases as the tax base increases.
        3. the tax rate remains the same as the tax base increases.
        4. the tax rate increases at a decreasing rate as the tax base increases.
      2. The Federal government can ease the inflationary pressure created in the U.S. through the European Recovery program by
        1. requiring that all the funds sent abroad be spent in the U.S.
        2. budgeting for a surplus.
        3. financing the program by borrowings from commercial banks.
        4. financing the program by borrowings from the federal reserve banks.
      3. The International Monetary Fund reflects the desire of the member nations to
        1. restore the pre-1914 gold standard.
        2. construct a stable yet flexible exchange rate system.
        3. eliminate, or at least reduce, tariff barriers.
        4. provide funds for the reconstruction of war-devastated Europe.
      4. A larger supply of dollars can be made available to other countries by
        1. stopping U.S. gold purchases and thus ending the drain of gold from abroad.
        2. reducing U.S. purchase of foreign securities.
        3. reducing U.S. trade barriers, particularly tariffs.
        4. continuing subsidies to American agriculture.
      5. The main source of instability and disturbance in the international dealings of the U.S. during the inter-war years was
        1. the surplus in the supply of dollars made available to other countries throughout the period.
        2. caused by deficient foreign demand for U.S. products.
        3. the extraordinary amplitude of fluctuations in the U.S. domestic economic life with concomitant variations in our purchases of foreign goods and services.
        4. stability of the movements of capital, into and out of the U.S.
      6. Which of the following would tend to increase the value of the dollar relative to the British pound under a system of free exchanges?
        1. Purchase by U.S. citizens of bonds issued by a British corporation.
        2. Payment of dividends by a British firm to U.S. stockholders.
        3. Flight of short term capital from U.S. to Great Britain.
        4. Greater increase in U.S. prices than in British prices.
      7. To find the marginal physical product of a factor we
        1. divide the total product by the number of additional units of the factor.
        2. see how much the total product has increased as a consequence of having used a small additional amount of the factor in question while holding the input of other factors fixed.
        3. examine the rate of change of average product.
        4. see how much the total product has increased as a consequence of having used a small additional amount of the factor in question along with the technologically appropriate additional amounts of the cooperating factors.
      8. A depression in the U.S. would tend to spread to foreign countries
        1. through lower incomes in the U.S., therefore lower U.S. imports, therefore lower incomes in countries exporting to the U.S.
        2. through lower incomes in the U.S., therefore greater importation of foreign goods, therefore lower real incomes abroad.
        3. through low prices in the U.S. causing greater demand in the U.S. for foreign commodities because of the Law of Demand.
        4. None of the above is an acceptable answer.
      9. Equity investments (stocks) rather than ordinary lending (bonds) is preferred as an implementation of a policy of foreign investments because
        1. the return is more certain.
        2. stocks are easier to sell in this country.
        3. the return is geared to the level of economic activity in the foreign country and, therefore, doesn’t represent such a burden in times of economic stress.
        4. the return is larger.
      10. A laborer’s reservation price is that which
        1. every other unit of labor receives.
        2. is so low that he prefers not to work.
        3. is the minimum amount he will take and still work.
        4. is so high that when he gets it he will refuse to work anymore.
      11. Once economic recovery has set in, inflationary price rises are likely to occur, even before full employment is reached, provided that
        1. the supply of some factor services is inelastic.
        2. the supply of some factor services is elastic.
        3. large scale increases in productivity take place.
        4. a sudden recession occurs in several important foreign countries.
      12. “All employees who, fifteen days after April 23, 1947, are members of the Union in good standing in accordance with its constitution and by-laws and all employees who become members after that date shall, as a condition of employment, remain Union members in good standing for the duration of this Agreement.”
        The above section of a trade agreement is commonly referred to as

        1. a union ship clause.
        2. a closed shop clause.
        3. bargaining for members only.
        4. None of these.
      13. A businessman produces a product using only one variable input, labor, and one fixed input, machinery. He pays his labor under a piece rate system and hires it in a competitive market. In the short run, if he increases his output
        1. his average variable cost will fall.
        2. his average variable cost will rise.
        3. his average variable cost will remain the same.
        4. his average variable cost will first fall and then rise.
      14. It is commonly believed that taxes upon economic profits are not shifted in the short run because
        1. redistribution of income and consequent changes in demand which occur are negligible.
        2. profit taxes are not business costs and hence do not alter the adjustment of output (therefore supply) which maximizes profits.
        3. neither the “marginal” firm nor individual ever pays taxes on profits.
        4. migration of capital occurs so speedily that the readjustment does not necessitate price changes.
      15. All but one of the following are disadvantages of a system of free or flexible exchange rates. That one is:
        1. encouragement to speculation in the exchanges.
        2. sacrifice of autonomy in a country’s internal economic policy.
        3. tendency toward retaliatory action by countries concerned.
        4. discouragement to traders and investors in the international field.
      16. The greater the divergence between a country’s opportunity cost ratio before trade and the international exchange ratio after trade,
        1. the less will be that country’s gain from international trade.
        2. the greater will be its gain.
        3. the less will be the extent of its specialization.
        4. the less vulnerable will it be to external deflationary influences.
      17. Under monopolistic condition an entrepreneur will hire more of a factor so long as
        1. its marginal physical product continues to be positive.
        2. the value of the marginal physical product is greater than the cost of the additional amount of the factor.
        3. he can sell the extra amount produced.
        4. None of the above is an acceptable answer.
      18. If an industry employs units of a factor with relatively high transfer earnings side by side with other units (of equal quality) whose transfer earnings are lower and if all units of the factor receive the same payment
        1. the former may be said to enjoy a rent-like return.
        2. the latter may be said to enjoy a rent-like return.
        3. the industry may be said to enjoy a rent-like return.
        4. the concept of rent doesn’t apply here.
      19. A necessary condition for “forced saving” is
        1. an expansion of credit resulting in the employment of men and resources previously unemployed.
        2. some people having incomes which don’t rise as rapidly as prices.
        3. banks being completely loaned up.
        4. None of the above is an acceptable answer.
      20. To determine whether the U.S. terms of trade improved between 1940 and 1947, which of the following would you need to know?
        1. The amount of gold imports during the period.
        2. The price (in the same currency) of U.S. imports and exports in 1940 and 1947.
        3. The rate of exchange between the dollar and some other important currencies (say the pound) in 1940 and 1947.
        4. The price level in the U.S. in 1940 relative to that in the rest of the world.
      21. A larger volume of government deficit expenditure will be required to bring about a given increase in employment
        1. the greater the elasticity of the supply of labor.
        2. the greater the velocity of money.
        3. the less the elasticity of supply of all factors of production.
        4. the greater the confidence of businessmen in the effectiveness of the government policy.
      22. A U.S. corporation may pay a net income tax when it has made an “economic loss” rather than “economic profits” because:
        1. the corporate income tax and excess profits tax together may exceed 100% of statutory net income.
        2. the corporate income tax rate structure is regressive.
        3. all interest payments but no dividends are deductible as costs before computing net income.
        4. the corporate income tax is a “benefit tax” on the privilege of doing business in the corporate form and hence takes no account of losses.
      23. A building and lot are valued at $20,000, and it is expected that the property will yield annual net income after taxes of $800 for an indefinite future period. Subsequently, a 2% rise in the tax rate on real property occurs which is expected to be permanent. The tax is capitalized if:
        1. the property is then sold for $10,000.
        2. the property is then sold for $12,000.
        3. the property is then sold for $30,000.
        4. the income from the property increases $400 annually because the tax is shifted.
      24. Assume that in 1937 the equilibrium rate of exchange between the U.S. and Great Britain was $5 to one pound, and that since that time the American price level has doubled and the British price level trebled. According to the theory of “purchasing power parity,” the new equilibrium rate of exchange will be:
        1. $3.33 to one pound.
        2. the same as the old rate.
        3. $7.50 to one pound.
        4. $6.25 to one pound.
      25. Great Britain imports raw materials in order to manufacture finished goods for exports. A devaluation of the pound sterling would
        1. tend to raise the price of British exports in foreign markets because the price of raw materials in Britain would rise.
        2. tend to lower the price of British exports in foreign markets because of the lower cost of pounds in terms of foreign currencies.
        3. have an indeterminate effect because both the above tendencies would exist.
        4. None of the above is an acceptable answer.
      26. Government deficit expenditures will fail to increase the money national income unless
        1. prices rise rapidly as a result of the policy.
        2. the difference between government expenditures and taxation is more than any reduction in private investment that may take place.
        3. wages of workers rise enough to prevent any profits which would be the direct result of the expenditures.
        4. None of the above is an acceptable answer.
      27. Suppose a firm uses 1,000 machines to produce 100,000 units of product per year. Suppose the machines have a useful life of five years, and that the machines are replaced in regular annual amounts. Then the normal demand for machines by this firm will be 200 per year.
        If the demand for the firm’s product rises 10% in some year, what will be the increase in its demand for machinery for this year?

        1. 20%
        2. 10%
        3. 50%
        4. 500%
      28. In general the elasticity of supply of agriculture products is less than that of manufactured products. In the early 1930’s the demand for virtually all goods declined. This would cause
        1. an improvement in the terms of trade of Great Britain who imports agriculture goods and exports manufactured goods.
        2. the opposite.
        3. the terms of trade of countries exporting agricultural products to improve.
        4. None of the above is an acceptable answer.
      29. Given the requirement that all individuals are to sacrifice equally in bearing the burden of taxation, then it follows that the maximum degree of progression which may be introduced into the income tax is limited only by
        1. the rate at which marginal utility decreases with increases in income.
        2. the size of income.
        3. the needs of government for revenue.
        4. the rate at which marginal utility increases with increases in income.
      30. Given: the same amount of labor (taken as representative of all the factors which in country A produces either 80 T or 160 L, in country B produces either 60 T or 50 L. One day’s labor in A produces one T or two L and receives a wage of $10.00. The wage of a day’s labor in B is $6.00. We assume that each country has a constant opportunity cost relationship between the two goods and, therefore, specializes completely in the production of one good. The terms of trade will be:
        1. 10 T for 8 L
        2. 3 T for 8 L
        3. 5 T for 8 L
        4. 3 T for 8 L

 

PART III

[Note: It appears that the typesetting of Part III that starts a new page in the original mistakenly numbered questions from  16 to 22]

Indicate on the separate answer sheet the one best answer to each of the following questions. For each correctly marked answer, credit is given. For each incorrectly marked answer, credit is taken away. For each question not answered, credit is neither given nor taken away.
Allow approximately twenty (20) minutes for this part of the exam.

The following items represent all the available information on the balance of payments for Ruritania in the year 194x. The Ruritanian monetary unit is the dollar.

Interest on foreign bonds owned by Ruritanians $15
Expenditures of foreign tourists in Ruritania $10
Exports (merchandise) $440
Profits on Ruritania’s direct investments abroad $55
Imports (merchandise) $225
Expenditures of Ruritanian tourists abroad $80
Net increase in short-term commercial loans made by Ruritanians $50
Profits on foreigners’ direct investment in Ruritania $10
Fees on insurance written for foreigners $10
Interest on net increase in short-term commercial loans made by Ruritanians $5
Interest on Ruritanian bonds owned by foreigners $70
Net long-term loans made by Ruritanians $85

 

      1. On the basis of these items, the total number of dollars supplied by Ruritania in 194x is
        1. $470
        2. $475
        3. $520
        4. $530
        5. $535
      2. On the basis of these items, the total number of dollars demanded on current account (trade and service items) in 194x is
        1. $515
        2. $520
        3. $530
        4. $535
        5. $585
      3. On the basis of these items, the total number of dollars supplied by Ruritania on capital account (capital items) in 194x is
        1. $0
        2. $85
        3. $115
        4. $135
        5. $155
      4. On the basis of these items, the total number of dollars demanded on capital account in 194x is
        1. $0
        2. $85
        3. $115
        4. $135
        5. $155
      5. If Ruritania were on the gold standard, her balance of payments in 194x would result in
        1. an increase in her gold reserves of $115.
        2. an increase in her gold reserves of $105.
        3. an increase in her gold reserves of $15.
        4. a decrease in her gold reserves of $5.
        5. a decrease in her gold reserves of $15.
      6. If Ruritania were on an inconvertible paper standard, her balance of payments in 194x would result in
        1. depreciation of the currency.
        2. inflation of the currency.
        3. devaluation of the currency.
        4. appreciation of the currency.
        5. deflation of the currency.
      7. From the balance of payments data, one can infer that Ruritania is a
        1. debtor country on long-term account.
        2. debtor country on short-term account.
        3. creditor country on long-term account.
        4. creditor country on short-term account.
        5. One cannot infer that Ruritania is in any of the above positions.

Final. May, 1948.

_____________________

 

1947-48
HARVARD UNIVERSITY

This part of the examination is to be written in the blue book AFTER you have finished the multiple choice test.

I
(Forty minutes)

      1. Outline and explain the monetary and fiscal policies appropriate to the several phases of the business cycle.

II
Answer any TWO questions
(Twenty-five minutes each)

      1. Describe and discuss the principal economic factors influencing the wage policy adopted by the trade unions in the hosiery industry in the period from 1920 to 1940.
      2. Explain the differences between rent, quasi-rent, and interest, and give specific illustrations of each.
      3. Discuss the possible defects of a progressive tax levied upon personal income. In your opinion do these defects arise from progressive personal income taxation as such, or from the particular form of the federal tax in the United States? Explain.

 

Final. May, 1948.

 

Source: Harvard University Faculty of Arts and Sciences. papers Printed for Final Examinations: History, History of Religions,…,Economics,…Military Science, Naval Science. May, 1948. Harvard University Archives, Harvard Final Examinations, 1853-2001. Box 15 of 284.

Categories
Exam Questions Northwestern Suggested Reading Syllabus

Northwestern. Monetary Policy Readings and Exam. Modigliani, 1961

 

Between his professorships at Carnegie and MIT, Franco Modigliani briefly held a professorship at Northwestern. It appears that Northwestern could not be faulted in its pursuit and courtship of Modigliani, but one sees that Modigliani’s academic heart was left in Cambridge. He answered the call to MIT, undoubtedly leaving a broken hearted colleague or two in Evanston.

Below the reading list and final exam questions for Franco Modigliani’s course at Northwestern “Monetary Policy”.

____________________________

Modigliani remembers Northwestern

Carnegie granted me a sabbatical year in 1957-58, during which I was a visiting professor at Harvard, where I stood in for Leontief (who was on leave)…At the end of 1959 I was again invited to be a visiting professor, but this time at MIT. I intended to accept, but the administration at the Carnegie Institute was against it. In that period I felt rather annoyed by the university, for I had the impressiona that the administration did not intend to invest resources in the economics sector. To my dismay, they decided not to replace an excellent economist, Alexander Henderson, who had worked alongside me and died prematurely…
Serena and I therefore decided it was time to move on and accepted MIT’s offer and an invitation to occupy a permanent chair at Northwestern University, with the proviso that I be allowed to retain my post of visiting professor at MIT. The year 1960, then, was a crucial one, for I fell in love with MIT. It was a delight to have so many colleagues who were both at the top of the profession and pleasant. The administration aimed only to oil the wheels of the teacher’s liffe, and the students were all of the first quality…
At MIT everyone knew I had the commitment to go to Northwestern and, nobless oblige, no one tried to deter me. The University of Northwestern [sic] gave us a grand welcome. We found a large funished house awaiting us near the campus, and we were taken to avarious areas in order that we might choose where to buy our home. But we made too many comparisons with MIT and could not make the decision to put down roots. Everyone was too kind, too solicitous, and maybe we had the feeling as of being animals in a zoo, with everybody asking us about Italy. Well, our hearts were still back at MIT. Judge, then, how happy we were when, at Christmas, the dean of the Sloan School at MIT phone me and asked: “Franco, now you’ve had a taste of Northwestern…what about coming back to us?” We had no hesitation, and in June 1962 Serena returned to Massachusetts alone and bought our house in Belmont, where I joined her as soon as I had finished my classes in Evanston and where we spent 36 happy years.

Source:  Franco Modigliani, Adventures of an Economist. New York: Texere, 2001, pp. 91-2.

____________________________

NORTHWESTERN UNIVERSITY
Department of Economics
Economics C-30
Mr. Modigliani

Fall Term 1961

C-30 MONETARY POLICY

Reading List I

Books suggested for general background and review

Chandler—The Economics of Money and Banking, 3rd edition
Day and Bean—Money and Income
Sayers—Modern Banking

  1. The Supply of Money, the Banking System, Financial Intermediaries and the Matrix of Claims

Meade, J. E.—“The Amount of Money and the Banking System”—Readings in Monetary Theory.
The Federal Reserve System—Purposes and Functions—Ch. I-VIII and XIII
H.C. Carr—“Why and How to read the Federal Reserve Statement” Journal of Finance, Dec. 1959
Roosa, R. V.—Federal Reserve Operations in the Money and Government Securities Markets
Chandler, L. V.—“Federal Reserve Policy and the Federal Debt”—Readings in Monetary Theory
Federal Reserve Bulletin—August 19959 “A quarterly presentation of Funds, Saving and Investment”

 

Reading List II

  1. The Demand for Money

Fisher, I.—The Purchasing Power of Money, Chs. 1-6 and 8
Robertson, D.—Money, Chs. 4-6
Pigou, A.C.—“The Value of Money”, Readings in Monetary Theory
Hicks, J. R.—“A suggestion for simplifying the Theory of Money”, Readings in Monetary Theory
Tobin, J.—“The interest elasticity of Transaction Demand for Cash”, Review of Economics and Statistics (RE&S), August 1956
Keynes, J. M.—General Theory, Ch. 15
Friedman, M.—“The Restatement of the Quantity Theory of Money”, in Studies in the Quantity Theory of Money
Latané, H.A.—“Cash Balances and the Interest Rate”, RE&S, Nov. 1954, pp. 456-460
___________–“Income Velocity and Interest Rates”, RE&S, Nov. 1960, pp. 445-449
Stedry, A.C.—“A Note on Interest Rates and the Demand for Money”, RE&S, August 1959
Bronfenbrenner and Mayer—“Liquidity Functions in the American Money”, Econometrica, October 1960, Sects. I-IV
Friedman, M.—“The Demand for Money: Some Theoretical and Empirical Results”, JPE, August 1959

 

Reading List III

  1. The Modus Operandi of Monetary Policy—Money and Liquidity—Monetary and Fiscal Tools.

Keynes, J.M.—A Treatise on Money—Ch. 13, 31, 37.
Keynes, J.M.—The General Theory of Employment, Interest and Money—Ch. 2, 6, 10, 11, 18, 19, 21.
Hicks, J.R.—“Mr. Keynes and the Classics”—Readings in the Theory of Income Distribution.
Modigliani, F.—“Liquidity Preference and the Theory of Interest and Money”—Readings in Monetary Theory (except sections 10 and 13)
Patinkin, D.—“Price Flexibility and Full Employment”—Reading in Monetary Theory
Tobin, J.—“A Dynamic Aggregative Model”, JPE, April, 1955 (espec. pp. 103-111)
Modigliani, F.—“Long Run Implications of Alternative Fiscal Policies and the Burden of the National Debt”—(Mimeographed)
Roosa, R.V.—“Interest Rates and the Central Bank”—Money, Trade and Economic Growth; Essays in Honor of John H. Williams
Kareken, J.H.—“Lender’s Preferences, Credit Rationing and the Effectiveness of Monetary Policy”, Review of Economics and Statistics, August 1957.
Friedman, M.—“A Monetary and Fiscal Framework for Economic Stability” Readings in Monetary Theory.
American Assembly—United States Monetary Policy Ch. 1, 2, 7.
Friedman, M.—A Program for Monetary Stability, (Fordham University Press)
Axilrod, S.H.—“Liquidity and Public Policy,” Federal Reserve Bulletin, October 1961.

 

Reading List IV

  1. The Term Structure of Interest Rates, Monetary Policy and Debt Management

*Lerner, A.P.—“Essential Properties of Interest and Money”, QJE, May 1952
*Lutz, F.—“The Structure of Interest Rates”, Readings in the Theory of Income Distribution.
Hawtrey, H. G.—A Century of Bank Rates, Ch. VI
*Tobin, J.—“Liquidity Preference as Behavior Toward Risk”, Review of Economic Studies, Feb. 1958
*Meiselman, D.—“Expectations, Errors, and the Term Structure of Interest Rates” (mimeographed)
*Riefler, W.W.,–“Open Market Operations in Long Term Securities”, FRB, Nov. 1958
*Young, R.A. and Yager, C.A.—“The Economics of ‘Bills Preferably’” QJE, August, 1960.
Conrad, J.W.—An Introduction to the Theory of Interest. University of California Press, 1959 (especially part Three)

 

Final Examination
December 14, 1961
8:00-10:00

ANSWER ANY FOUR QUESTIONS

  1. Under the present system commercial member banks are required to keep a reserve proportional to their demand deposit liability in the form of cash or deposits with the Federal Reserve Banks.
    1. What is the function and role of these reserve requirements?
    2. What would be the major implications of requiring a reserve proportional to their commercial loans rather than to their demand deposits. Explain whether and why you would favor or oppose such a change?
  2. Some authors have maintained that the ability of certain financial intermediaries other than banks to create close money substitutes seriously impairs the effectiveness of monetary policy. Spell out the argument and assess its validity.
  3. Evaluate the relative merits and shortcomings of monetary and fiscal policies in dealing with “cost push” inflation.
  4. Explain the essence of the so called “availability doctrine” and its relevance for an understanding of the modus operandi of monetary policy.
  5. State the main arguments for and against the “bills only” doctrine and give your own evaluation and recommendation.
  6. The Federal Reserve Board and the Federal Deposit Insurance Corporation have recently raised the maximum rate payable on time deposits from 3 to 4%.
    1. What are the purposes and the likely effects of this move?
    2. Even though the new provision does not apply to Saving and Loan Institutions a spokesman for the United States Saving and Loan League was quoted by the Sun-Times of December 2 to the effect that the change “may very well mean some dividend rate increase by Savings and Loan institutions in different parts of the country” and “If Savings and Loans have to pay more for dividends they will have to increase rates on mortgages. This is a surprising development in view of the administration’s announced drive to hold mortgage rates down.” Assess this statement critically.

 

Source: Duke University, Rubenstein Library. Franco Modigliani Papers, Box T6, Folder “Teaching material, Economics, 1961”.

Image Source: Website Archivio Storico degli economisti.