The public finance syllabus for 1954-55 as taught by J. Keith Butters and Arnold M. Soloway has been transcribed and posted earlier. With this post we now have the January (mid-year) and May (end-year) exams for this course.
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1954-1955
HARVARD UNIVERSITY
ECONOMICS 151 AND 251
Mid-Year Examination. January, 1955
Answer Question 1: recommended time one hour and fifteen minutes.
- Assume that within the next year or so the current business expansion continues to the point where unemployment is reduced to a very low level and inflationary price rises are beginning to be evident. Assume that this expansion is caused by an intensification of factors now present in the economy such as: (a) a high level of consumer spending; (b) large business expenditures on plant and equipment and in the construction market generally; (c) a resumption of fairly rapid inventory accumulations. Assume that the international situation remains approximately unchanged and that for the fiscal year ending June 30, 1956 the administrative budget of the federal government is expected to be approximately in balance at a level of about $65 billion.
- Query: Under these circumstances compare the relative effectiveness and merits as anti-inflationary fiscal measures of (a) a government surplus produced by a reduction in the level of government expenditures on real goods and services; (b) an equivalent surplus caused by an increase in tax rates; and (c) a balanced reduction in expenditures and receipts. In answering this question specify any assumptions which you care to make or need to make.
- Query: Under these circumstances indicate the extent to which you would prefer to rely (a) on fiscal policy techniques (such as any of the above) as compared with (b) measures of monetary policy and debt management. What are the reasons for your preferences? To the extent that you prefer to rely partly or wholly on measures of monetary policy and debt management, indicate the specific techniques which you would recommend and their presumed effects.
Answer Question 2: recommended time forty-five minutes.
- “The procedures by which the federal budget of the United States government is formulated and enacted tend to produce undesirable distortions in the amount and distribution of federal expenditures and receipts.” Discuss this statement. In your discussion indicate the specific features of the budgetary process which produce such distortions and the theoretical principles in terms of which the proper distribution and amount of federal expenditures and receipts should be appraised.
Answer either Question 3 or 4: recommended time one-half hour.
- Describe the federal old-age and survivors’ insurance program now in effect in the United States. Indicate the main trends in the historical evolution of this program since its original enactment in 1935. What gaps or defects from either an economic or an equity standpoint do you see in the program as it now exists?
- Discuss the main historical shifts which have taken place in the revenue and expenditure patterns of state and local units of government as compared with those of the federal government of the United States during the period 1925-1950. What problems have been created by these shifts and what courses of action are indicated as a means of overcoming these problems?
Answer Question 5: recommended time one-half hour.
- Under the present federal taxing process, how is the general public interest protected from overextensions of favors to special interest groups? Is the present protection sufficient? What modifications, if any, would you suggest in the present procedures? (Answer this question specifically in terms of the reading period assignment.)
Source: Harvard University Archives. Harvard University. Final examinations, 1853-2001 (HUC 7000.28). Bound Volume 107, Final Exams—Social Sciences—Jan. 1955, Papers Printed for Final Examinations: History, History of Religions, … , Economics, … , Naval Science, Air Science. January, 1955.
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1954-1955
HARVARD UNIVERSITY
ECONOMICS 151 AND 251
Final Examination. May, 1955
Answer Question 1: recommended time one and one-half hours.
- “Justice in taxation and a high rate of economic growth are two frequently stated aims of government policy.” Discuss the present personal and corporate income taxes in the light of these goals. In your discussion be specific as to the relevant issues such as (for example): concepts of justice; definitions of taxable income; the problem of capital gains; etc.
Answer three of Questions 2 through 5: recommended time one-half hour for each question answered.
- Sales and excise taxes should not be used in our federal tax structure because they are regressive, deflationary, and price-distorting. Discuss.
- When economists study a particular tax they use such terms as “shifting,” “incidence,” and “effects.” Define these terms and discuss them in connection with
- a tax on net profits
- a tax on the rent of land.
- Describe the present method of taxing transfers, either by gift or at death. Discuss the weaknesses of the present law and possible methods of correcting them.
- Discuss critically the major differences between Tucker and Musgrave in their analyses of the tax burden.
Source: Harvard University Archives. Harvard University. Final examinations, 1853-2001 (HUC 7000.28). Bound Volume 110, Final Exams—Social Sciences—June. 1955, Papers Printed for Final Examinations: History, History of Religions, … , Economics, … , Naval Science, Air Science. June, 1955.
Image Source: Harvard Business School, The Annual Report 1954.