Category: Exam Questions

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Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Core Dynamic Macro Half-course. Readings and exam. Solow, 1973

 

 

Reading list and exam questions for the half-term course quantitative macroeconomics taught by Franco Modigliani  that preceded Solow’s dynamic macroeconomics course during the first term of 1927-73 were posted earlier.

Economics in the Rear-view Mirror thanks Juan C. A. Acosta who copied this course syllabus and final examination that are found in the Franco Modigliani Papers (Box T7) at the Duke University Economists’ Papers Project and has graciously shared them for transcription here. 

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14.454
MACRO THEORY IV
Fall 1973, 2nd half

I. Growth Theory

background, if necessary: Solow, GROWTH THEORY, Ch. 1, 2

Burmeister and Dobell: MATHEMATICAL THEORIES OF ECONOMIC GROWTH, Ch. 1-4

and/or

Wan: ECONOMIC GROWTH, Ch. 1, 2, 4 (sec. 3)

Kahn: “Exercise in the Analysis of Growth,”
OXFORD ECONOMIC PAPERS, New Series, Vol. 11, 1959
pp. 143-156
(reprinted in GROWTH ECONOMICS, ed. A. K. Sen, Penguin)

Wan: Ch. 4, sec. 4

II. Optimal Growth

background, if necessary: Solow, GROWTH THEORY, Ch. 5

Burmeister and Dobell: Ch. 11

and/or

Wan: Ch. 9, 10

Koopmans: “Objectives, Constraints and Outcomes in Optimal Growth Models”
ECONOMETRICA, Vol. 35, 1967
pp. 1-15
(reprinted in Koopmans, SCIENTIFIC PAPERS, pp. 548-5609)

III. Capital Theory

Malinvaud: LECTURES ON MICROECONOMIC THEORY, Ch. 10

Hirshleifer: INVESTMENT, INTEREST AND CAPITAL, Ch. 2, 3, 4, 6

Dougherty: “On the Rate of Return and the Rate of Profit”
ECONOMIC JOURNAL, December 1972
pp. 1324-1349

Burmeister and Dobell: Ch. 8, 9

Weizsäcker: STEADY-STATE CAPITAL THEORY,
pp. 1-22, 32-47, and passim

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14.454 FINAL EXAM
R. M. Solow
19 Dec 1973

ANSWER TWO QUESTIONS, total time 1½ hours

  1. Suppose an economy with effectively unlimited supply of labor in the sense that any amount of labor is available (from an agricultural pool, say) at an institutionally determined real wage \bar{w} . In other respects the economy is like the standard one-sector model.
    1. Analyze the growth of such an economy if saving and investment are proportional to output. What might correspond to the “full employment, full utilization” assumption?
    2. What if saving and investment are proportional to profits?
    3. How does a once-for-all change in \bar{w} affect the growth path, and the share of wages in total output?
  2. Sketch an analysis of an optimal-capital-accumulation problem in which the criterion function values the capital stock (per worker) as well as consumption, for prestige or power reasons, say, so that instantaneous utility is written u(c,k). In particular, is it true, as we would expect, that such a society should save more than it would if it valued consumption only?
  3. Criticize the “neoclassical” theory of growth and capital; but do not be vague—where you have a complaint you should be prepared to suggest a better way.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Franco Modigliani, T7.

Image Source: Robert Solow in his office, MIT Museum Website.

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Exam Questions Harvard

Harvard. Exams for the three courses in political economy. Laughlin and Taussig, 1882-1883

 

 

After Professor Charles Dunbar stepped down from his Harvard Deanship, he took sabbatical leave to go to Europe in 1882-83. Frank William Taussig was appointed instructor to help J. Laurence Laughlin cover the three course offerings for political economy that year. In Taussig’s course scrapbook in the Harvard archive, we find that he listed grades for 71 students in Political Economy 1 (1882-83), i.e., about half of the reported enrollment for that course. Thus we may presume that Laughlin and Taussig taught separate sections of the course with a common final examination.

______________________________

Course Announcements

Political Economy.

1.  Mill’s Principles of Political Economy. — Lectures on Banking and the Financial Legislation of the United States. Mon., Wed., Fri., at 9. Mr. Taussig and Dr. Laughlin .

2.  Cairnes’s Leading Principles of Political Economy. — History of Political Economy. – McKean’s Condensation of Carey’s Social Science. — Lectures. Mon., Wed., Fri., at 2. Dr. Laughlin.

As a preparation for Course 2, it is necessary to have passed satisfactorily in Course 1.

3.  Economic Effects of Land Tenures in England, Ireland, France, Germany, and Russia. Once a week, counting as a half-course. Dr. Laughlin.

Source:  The Harvard University Catalogue, 1882-83, pp. 89-90.

______________________________

Course Enrollments

1.  Mill’s Principles of Political Economy. — Lectures. Dr. Laughlin and Mr. Taussig.

Total 155: 1 Graduate, 22 Seniors, 113 Juniors, 13 Sophomores, 6 Others. 3 hours/week.

2.  Cairnes’s Leading Principles of Political Economy. — History of Political Economy. — McKean’s Condensation of Carey’s Social Science. — Lectures. Dr. Laughlin. 3 hours/week.

Total 35: 2 Graduates, 24 Seniors, 8 Juniors, 1 Other.

3.  Studies in Land Tenures of England, Ireland, and France. — Theses. Dr. Laughlin. 1 hour/week.

Total 7: 1 Graduate, 6 Seniors.

Source: Harvard University. Report of the President of Harvard College, 1882-1883, p. 66.

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Course Examinations

POLITICAL ECONOMY 1.
Mid-year 1882-83

I.
(Answer briefly all of the following.)

  1. What distinction does Mill draw between productive and unproductive labor? Discuss the value of this distinction. Distinguish between productive and unproductive consumption.
  2. What is the distinction between fixed and circulating capital? Is money part of the fixed or of the circulating capital of a country? Why?
  3. What are the classes among whom the produce is divided? Are these classes necessarily or usually represented in as many different sets of persons? How could you classify the peasant proprietor?
  4. Of what commodities are the values governed by the law of cost of production? Explain the process by which that law operates.
  5. “Rent does not enter into the cost of production of agricultural produce.” Explain.
  6. What regulates the value of an inconvertible paper currency? What cause it to depreciate? Discuss briefly the results of depreciation.
  7. Arrange the following items on the proper sides of the account:—

Circulation

315.0
Due to Bans

259.9
Legal Tender Notes

63.2
Loans

1,243.2
Bond for circulation

357.6
Due from Banks

198.9
Deposits

1,134.9
Specie

102.9

Compute just how much circulation is permitted by our laws; and give in figures both the (1) reserve required at 25%, and the (2) difference between the actual and required reserve, on the basis of the above account.

  1. Compare the plans of our National Bank system with those of the Bank of England and the Imperial Bank of Germany in regard to the security of note-issues.

II.
(Answer more fully three of the following.)

  1. What are the constituent elements of what Mill calls “profits”? Explain what is meant in common language by the word “profits,” and discuss the nature of profits in this sense.
  2. “The laws of the production of wealth partake of the nature of physical truths…It is not so with the distribution of wealth. That is a matter of human institution solely.” Explain the distinction, and show its connection with the subjects of communism and socialism.
  3. Mention the methods by which it is attempted to keep gold and silver concurrently in circulation. Explain why “a double standard is alternately a single standard.” Does this tend to be the case now in the United States?
  4. Distinguish between real and proportional wages, and illustrate the distinction. In what sense is the word wages used when it is said that the profits depend on wages, rising as wages fall, and falling as wages rise?
  5. It is not a difference in the absolute cost of production which determines the international cost of exchange, but a difference in the comparative” Explain this proposition, and apply it to the trade between the United States and European countries. Is the trade between tropical and temperate countries based, in the main, on a difference of absolute or of comparative cost?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Mid-Year Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (February, 1883), pp. 8-10.

 

POLITICAL ECONOMY 1.
Year-end 1882-1883

I.
(Take all of this group.)

  1. Explain what is meant by a bill of exchange. What causes bills on a foreign country to be at a premium or discount? Show in what way the premium (or discount) is prevented from going beyond a certain point.
  2. Is there any connection between the rate of interest and the abundance or scarcity of money? Explain and illustrate the following: “The rate of interest determines the price of land and of securities.”
  3. Describe the three different kinds of cooperation, and say something of the success attained by each. What are the two classes of distributive cooperation, and wherein do they differ?
  4. Show under what circumstances the increase of capital brings about the tendency of profits to fall. What influences counteract this tendency?
  5. Explain what is meant by the rapidity of circulation of money. What is the effect of great rapidity of circulation on prices and on the value of money? What is the effect of the use of credit? Mention the more important methods in which credit is used as a substitute for money.

II.
(Omit one of this group.)

  1. Discuss the effect of the introduction of a new article of export from a given country on the course of the foreign exchanges in that country, on the flow of specie, and on the terms of international trade (i.e. on international values).
  2. What are the causes which enable one country to undersell another? Do low wages, or a low cost of labor, form one of those causes?
  3. Discuss the immediate and the ultimate effects on rents of the introduction of agricultural improvements. Do those ultimate effects which Mill describes necessarily take place?
  4. What is the immediate and what the ultimate incidence of a tax on houses? Show in what manner the incidence of a tax on building-ground differs, according as the tax is specific (so much on the unit of surface), or rated (so much on the value).

III.
(Omit one of this group.)

  1. Describe the situation which caused the banks in the United States to suspend specie payments in 1861.
  2. What is the difference between bonds and Treasury notes? Name and explain the different kinds of bonds issued during the war.
  3. Explain the causes which made possible the great sales of five-twenty bonds in 1863.
  4. What arguments were advanced for the continuance of the National Bank System in 1882?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Final Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1883), pp. 7-8.

 

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Course Examinations

POLITICAL ECONOMY 2.
Mid-year 1882-83

  1. Give a careful statement of Mr. Cairnes’s theory of market and normal value.
  2. How far is it right to suppose that the competition of (1) capital and (2) of labor is effective?
  3. Explain and discuss the statement that “the wages-fund expands as the supply of labor contracts, and contracts as the supply expands.”
  4. Agricultural products in England are as dear as one hundred years ago; in the meantime there has been extraordinary industrial progress. What conclusion is to be drawn as to the increase of wages and profits from the first fact, and who has ultimately gained by the second?
  5. Mill thinks that, although “the great efficiency of English labor is the chief cause why the precious metals are obtained at less cost by England,” the “somewhat higher range of general prices in England” is accounted for by the foreign demand, and the unbulky character of her commodities.
    What different explanation is offered by Mr. Cairnes?
  6. Examine the following:—
    “It seems to me that protection is absolutely essential to the encouragement of capital, and equally necessary for the protection of the American laborer….He must have good food, enough of it, good clothing, school-houses for his children, comforts for his home, and a fair chance to improve his condition. To this end I would protect him against competition with the half-paid laborers of European countries.”— Cong. Globe.
  7. If there should be a considerable falling off in the foreign demand for the products of one group of industries, such as our bread-stuffs, how would that affect wages in this country?
  8. What is the argument against the theory that the Bank of England brought about resumption of specie payments in England in 1821 by a contraction of its note-issues?
  9. In what period in the history of economic doctrines would you place the writer of the following passage?
    “The strength of a community declines with increase in the rate of interest. That increase results from efflux of the precious metals.” Explain.
  10. Comment on the main doctrines held by Cantillon and Storch.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Mid-Year Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (February, 1883), pp. 10-11.

 

POLITICAL ECONOMY 2.
Year-end 1882-1883

[Do not change the order of the questions.]

  1. Examine the following doctrine:—
    “If invention and improvement still go on, the efficiency of labor will be further increased, and the amount of labor and capital necessary to produce a further increased, and the amount of labor and capital necessary to produce a given result further diminished. The same causes will lead to the utilization of this new gain in productive power for the production of more wealth; the margin of cultivation will be again extended, and rent will increase, both in proportion and amount, without any increase in wages and interest. And so,…will…rent constantly increase, though population should remain stationary.”—Henry George, Progress and Poverty (p. 226).
  2. What is meant by the “comparative costs of production,” on which international values are said to depend, and how is that dependence to be reconciled with the fact that any given sale of goods is found to be an independent transaction, determined by the price of the commodity?
  3. How does the doctrine of reciprocal demand between different industries apply to the argument in favor of a diversity of employments in a new country, as laid down by Hamilton in his Report on Manufactures?
  4. Of the economic doctrines generally accepted to-day which would you consider as having originated with Adam Smith?
  5. Discuss the following words of Mr. Carey:—
    “From 1810 to 1815 mills and furnaces were built, but with the return of peace, their owners…were everywhere ruined…From 1828 to 1834, such establishments were again erected, and the metallic treasures of the earth were being everywhere developed; but, as before, the protective system was again abandoned, with ruin to the manufacturers.” (Vol. II, p. 224.)
  6. Explain the relation, in Mr. Carey’s system, between “wealth,” “utility,” “value,” and “capital.” State clearly the “harmony of interests” between labor and capital, and the connection of this with the wages question.
  7. Point out Mr. Carey’s objections to the doctrine of Malthus. How far does his position on this question affect his acceptance of Ricardo’s law of rent?
  8. Discuss the following statement:—
    “If such [a] league be formed on a permanent basis between a considerable number of important commercial countries, even though it does not embrace all countries, the relative value of gold and silver will be kept close to the mint ratio so established.”—A.Walker, Political Economy (p. 408).
  9. Examine this position:—
    “The rent of mines is not governed wholly by the economic law of rent which, as stated, has reference to the native and indestructible powers of the soil….By the very nature of such deposits [i.e. in mines], the enjoyment of mining privileges diminishes the sum of the mineral in existence. The mine may be ‘worked out’ in ten years or in twenty….The rent must be increased sufficiently to compensate for the ultimate exhaustion of the deposits: the destruction of the value of the estate.”
  10. Describe the form in which Germany actually received the payment of the indemnity from France.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Final Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1883), pp. 8-9.

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Course Examinations

POLITICAL ECONOMY 3.
Mid-year 1882-83

  1. What is the usual legal conception of property in the increased value of land? How far is this justified?
  2. In the claims of tenants for compensation for unexhausted improvements what weight do you give to the argument of landlords that legislation on this subject would be an interference with freedom of contract?
  3. What was the Agricultural Holdings Act of 1875? What were its results?
  4. Discuss the present length of leases in England, and compare with that of a century ago. Are there any political causes affecting the question?
  5. What is the aim of the Registration of Titles Act of 1875? What is the system of transferring property in England now actually in use?
  6. State some of the effects of the practice of entails on the application of capital to land. Point out how this question has been discussed in its relation to wages.
  7. What change has been going on in the character of English agriculture within the last thirty years? What influences do you attribute to American competition in this matter?
  8. In the depression of English agricultural interests, which class connected with the land seems to have suffered most?
  9. What has been the relation of the agricultural laborer to the land, and how far has it been possible for him to improve his position?
  10. It is said that farmers can use their capital more profitably in farming hired land than in sinking it in the purchase of the soil. What do you think on the advantages to the cultivators of owning the land in England?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Mid-Year Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (February, 1883), pp. 11-12.

 

POLITICAL ECONOMY 3.
Year-end 1882-1883

  1. State what you believe to be the most important effects of the Repeal of the Corn Laws upon agriculture and the present system of land-holding in England.
  2. It has been asserted that “a peasant population, raising their own wages from the soil, and consuming them in kind, are universally acted upon very feebly by internal checks, or by motives disposing them to restraint. The consequence is, that unless some external cause, quite independent of their will, forces such peasant cultivators to slacken their rate of increase, they will, in a limited territory, very rapidly approach a state of want and penury, and will be stopped at last only by the physical impossibility of procuring subsistence.” What testimony on this question is offered by the experience of France and Germany?
  3. How does absenteeism (1) affect the production of agricultural wealth? (2) Does it modify the laws of distribution?
  4. Give an explanation of the fact that in Ireland custom forces the tenant, not the landlord, to carry out the improvements on the soil. How far does this affect the question of compensation for unexhausted improvements.
  5. To what do you ascribe the “land-hunger” and rack-rents in Ireland? Why have manufactures not aided the agricultural classes, as they have in the north of England?
  6. What were the “Bright clauses” of the Irish Land Act of 1870, and their results? Describe briefly the provisions of the Irish Land Act of 1881.
  7. In view of new legislation in favor of English tenants, it is stated by the journals that to-day the Irish stands on a better legal footing than the English tenant. If this is true, point out the different advantages by the former.
  8. Under the old régime in France it is clear not only that there were many peasant proprietors, but also that agriculture was not flourishing. What other economic forces were at work, and what causes would you assign as the ones unfavorable to agriculture?
  9. What were the facts as to the increase of population (1) under the old régime, and (2) after the extension of small holdings? What light does this throw on the Irish land question?
  10. Discuss the evils supposed to arise from the French law of equal partition of property among the heirs at the death of the owner.
  11. Describe briefly the reforms of Stein and Hardenberg in the land legislation of Germany. What parallel is drawn between this plan and the course followed by France?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2. Bound volume Examination Papers, 1881-83. Papers Set for Final Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1883), pp. 9-10.

Image Source:  Harvard Library, Hollis Images. James Laurence Laughlin (left) and Frank W. Taussig (right).

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Exam Questions Harvard

Harvard. Examinations for both political economy courses. Dunbar and Laughlin, 1881-1882

 

Course offerings in economics at Harvard were pretty meager at the start of the 1880s. Two instructors covered two courses in 1881-82. Professor Charles Dunbar was serving his last year as Dean which probably explains why a young Ph.D., J. L. Laughlin (Harvard PhD, 1876), was even needed to share the burden of teaching the large introductory course.

Note: the mid-year examinations appeared to have been missed during my last visit to the Harvard archives, so  I’ll need to try to fill that gap during a future visit.

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Course Announcement

POLITICAL ECONOMY.
ELECTIVE COURSES.

1. Mill’s Principles of Political Economy.—Financial Legislation of the United States.—Lectures. Three times a week. Professor Dunbar and Dr. Laughlin.

Course 1 may be taken twice a week, if notice to that effect is given in advаnсе.

2. Cairnes’s Leading Principles of Political Economy.—Giffen’s Essays in Finance.—Lectures. Three times a week. Professor Dunbar.

As a preparation for Course 2, it is necessary to have passed satisfactorily in Course 1 (three hours).

Source: Harvard University Catalogue, 1881-82, p. 84.

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Course Enrollments

Political Econ. 1. Mill’s Principles of Political Economy.— Lectures on Banking and the Financial Legislation of the United States (3 hours, 2 sections). Prof. Dunbar and Dr. Laughlin.

Total 147: 23 Seniors, 97 Juniors, 17 Sophomores, 2 Freshmen, 8 Others.

Political Econ. 2. Cairnes’s Leading Principles of Political Economy.— Giffen’s Essays in Finance.— Lectures and Theses. (3 hours, 1 section). Prof. Dunbar.

Total 32: 2 Graduates, 21 Seniors 9 Juniors.

Source: Harvard University. Report of the President of Harvard College, 1881-82, p. 5.

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Course Examination

POLITICAL ECONOMY 1.
Year-end 1881-1882

(Omit one question from each group.)

I.

  1. What conclusion is reached by Mr. Mill respecting the objections to the use of labor-saving machinery?
  2. Are railway shares, stocks of wine, wheat, munitions of war, and land considered capital, or not?
  3. Explain fully why it is that capitalists cannot compensate themselves for a general high cost of labor through any action on values and prices.
  4. What determines the rate of interest on loanable funds? Is the “current [or ordinary] rate of interest the measure of the relative abundance or scarcity of capital”?

II.

  1. How is it that some agricultural capital pays rent, even if resort is not had to different grades of land?
  2. What connection exists between the rate of wages in any country and the productiveness of its soil?
  3. Explain what is meant by the tendency of profits to a minimum, and by the stationary state.
  4. In what cases would duties on imported commodities fall on the producers?

III.

  1. What are the reasons for the change in the normal values of manufactured and of agricultural commodities, respectively, during the progress of society?
  2. In trying to explain high prices (as at the present time), point out what other factor than quantity of money is to be taken into account. As a matter of fact, how does the importation of specie enter the channels of trade and affect prices?
  3. Why is it necessary to make any different statements of the laws of value for foreign than for domestic products? What is the law of international value?
  4. In what way are gold and silver distributed among the different trading countries? Between different parts of the same country?

IV.

  1. How did depreciation of the currency facilitate the sale of five-twenty bonds in 1863-64?
  2. What advantage did the government obtain by giving the five-twenty form to so many of its bonds?
  3. What provision was made in the original National Bank Act as to reserves to protect circulation and deposits, and what reserves are now required by law
  4. In what cases can payments be legally made in greenbacks and in national bank-notes respectively?

 

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1914, Box 2, Bound Volume Examination Papers, 1881-83. Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1882), pp. 7-8.

______________________

Course Examination

POLITICAL ECONOMY 2.
Year-end 1881-1882

In answering the questions do not change their order.

  1. What is the reason for Adam Smith’s proposition that “the price of corn, in the progress of society, reaches a maximum, beyond which it cannot advance”? Can you work out the same result by a different course of reasoning from that given by Cairnes?
  2. Explain the statement that “the high scale of industrial remuneration in America, instead of being evidence of a high cost of production in that country, is distinctly evidence of a low cost of production.”
  3. If the common saying that “the value of gold is the same all the world over” has no foundation, how does a supply of new gold distribute itself over all countries and over all commodities in each country?
  4. Malthus, Ricardo, Mill, Cairnes:—State their relation to each other in the development of economic science.
  5. How did the payment of the French indemnity to Germany affect the economic condition of Austria and of the United States?
  6. In a speech made in April, 1876, Senator Sherman says that, after the introduction of the gold standard by Germany in 1873 and the limitation of the coinage of silver by the Latin Union,—
    “A struggle for the possession of gold at once arose between all the great nations, because everybody could see that if $3,200,000,000 of silver coin were demonetized, and $3,500,000,000 of gold coin made the sole standard, it would enormously add to the value of gold, and the Bank of France, the Bank of England and the Imperial Bank of Germany at once commenced grasping for gold in whatever form. Therefore, what we have observed recently is not so much a fall of silver as it is a rise of gold, the inevitable effect of a fear of the demonetization of silver.”
    In what form would the process of “grasping for gold” manifest itself, and how do the facts bear out the above statement?
  7. To what extent is it, in the long run, a misfortune for England that her agriculture should be in part superceded by supplies of cheap food poured in from America?
  8. State your views as to the economic significance and probable permanence of the present excess of exports from the United States.
  9. How is the supposed accumulation of capital by England in the period from 1875 to 1881 to be reconciled.
    (1), with the great depression of business for most of the time;
    (2), with the remarkable excess of imports?
  10. Examine the reasoning of the following extract:—
    “About $11,000,000 is now spent in the United States annually for new ships, wooden and iron, and about $2,000,000 more for the repair of old ones….Under a policy of government encouragement, expenditures for iron and wooden ships would be increased at least to $40,000,000 a year….[and] the expenditures for American labor and supplies, in operating the ships, would be increased by $10,000,000 or $15,000,000, perhaps considerably more. That is to say, there would then be expended in the United States an immense sum of money not now expended, which might be as large as $40,000,000, which would diffuse itself throughout the community, and bless and quicken every department of human industry. Best of all, the money, thus spent, would be principally obtained from the foreigner. It would come from the earnings of the ships, which, in the export trade at least, are paid by consumers in foreign lands. In the import trade the money is paid by consumers here and is carried away from the country. The larger part of the money, therefore, would be a pure gain to the United States…These lines would save to the country at least one half of the $50,000,000 of freight money now paid on imported goods, and they would earn at least one half of the large sum paid by foreign nations on the goods exported from this country. Then, they would give encouragement to tens thousands more of American citizens on land and sea.”

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1914, Box 2, Bound Volume Examination Papers, 1881-83. Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1882), pp. 8-9.

Image Source:  Harvard Library, Hollis Images. Charles F. Dunbar (left) and James Laurence Laughlin (right).

Categories
Exam Questions Johns Hopkins

Johns Hopkins. Doctoral exams taken by Helen Potter, 1942

 

The previous post introduced us to the life and professional career of Helen Potter, Vassar (AB, 1933) and Johns Hopkins (PhD, 1942). One is hard-pressed to explain the purpose of such (rather easy) exit exams administered six weeks before commencement. Perhaps as a crude way to document that the submitted dissertation was not merely bought and paid by someone with abolutely no knowledge of economics. Anyone have a clue?

_____________________

EXAMINATION IN POLITICAL ECONOMY
(Economic Theory)

Miss Helen Potter
April 21, 1942

  1. Explain Keynes’ theory concerning the factors that determine the volume of employment.
  2. Discuss the origin and development of four concepts that are basic in modern economic thinking.
  3. What are some of the more important forms of an equation of exchange showing the relationship between money and prices? Explain the meaning of the various forms and discuss critically.
  4. Discuss briefly: backward sloping supply curves; kinked demand curves; pure competition; indifference curves; monopsony; the coefficient of acceleration; the widening and deepening of capital; Hayek’s concept of the lengthening of the period of production.
  5. Explain the fundamental economic theories involved in the working of an international gold standard, and show their application to the problem of reestablishing such a standard.
  6. Discuss equilibrium.
  7. Explain the main features of Schumpeter’s theory of business cycles.
  8. Discuss price under monopolistic competition.

_____________________

EXAMINATION IN POLITICAL ECONOMY
(Applied Economics)

Miss Helen Potter
April 22, 1942

  1. Is there any justification for price increases in a war economy? Explain the more important problems involved in any attempt to put into effect a program of price-fixing.
  2. From an economic point of view wherein is the corporation superior to other forms of business organization?
  3. Explain the problem of war financing. What factors need to be taken into consideration? Suggest a program that you think meets the requirements.
  4. How does trading on the equity by a bank differ from trading on the equity by a public utility? How is a bank to protect itself when trading on the equity?
  5. Explain the nature of the control over credit exercised by the Federal Reserve System. Contrast the relative importance of Federal Reserve policy and fiscal policy under the New Deal. Consider only the situation prior to the inauguration of the defense program.
  6. What is the role of probability in the formulation of scientific laws?
  7. Analyze the probable effect of a general increase in wages upon business activity during a period of depression.
  8. Define: an average; an index number; frequency distribution; a trend; seasonal variation; random sampling:
  9. Discuss the most important problems that would arise in connection with national planning.

 

Source: Johns Hopkins University. Eisenhower Library, Ferdinand Hamburger, Jr. Archives, Department of Political Economy. Series 6. Box 3/1, Folder “Graduate Exams, 1933-1965”.

Image Source: Gilman Hall, Johns Hopkins University from the 1924 yearbook Hullabaloo.

Categories
Exam Questions Harvard

Harvard. Labor economics courses taught by Charles E. Persons, 1928-1929

In the previous post we met the Harvard Ph.D. alum (1913) Charles E. Persons whose career transitioned from the life of an academic economist to that of a labor policy activist/government official right after he covered labor economics courses for William Z. Ripley who was on leave due to health reasons (more to report on Ripley, but later). This post puts together the materials (enrollment statistics, reading period assignments and two course exams) I could find for the courses taught by Persons during his three semesters teaching at Harvard during the spring term 1928 and the full academic year 1928-29.

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Courses taught by Charles E. Persons at Harvard

Enrollment, Economics 6a2
Spring Term, 1928

[Economics] 6a 2hf. Professor Charles E. Persons (Boston University), assisted by Mr. Joslyn.—Trade Unionism and Allied Problems.

Total 31: 15 Seniors, 14 Juniors, 1 Sophomore, 1 Other.

Source: Harvard University. Report of the President of Harvard College 1927-1928, p. 74.

 

Course Assignment for Reading Period
Economics 6a2
Spring 1928

Economics 6b [sic, should be is “6a”] [Trade Unionism and Allied Problems.]

Select one of the following groups.

  1. Historical
    1. Webb, S. & B.: History of Trade Unionism, Chs. I, II, III, IV and VII.
    2. Perlman, S.: History of Trade Unionism in the United States.
  2. Trade Union Function.
    1. Webb, S. & B.: Industrial Democracy, Pt. II, pp. 145-599.
  3. Employer’s Programs.
    1. Hoxie, R. F.: Scientific Management and Labor, pp. 1-140.
    2. Burritt, A. W., et al.: Profit Sharing; the Principles and Practice. New Edition, 1926).
  4. Government Control.
    1. Selekman, B.: Postponing Strikes.
    2. Wolf, H. D.: The Railroad Labor Board.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 2, Folder “Economics, 1927-1928”.

 

1927-28
HARVARD UNIVERSITY
ECONOMICS 6a2
[Final Examination, Spring 1928]

Group I
Answer one. Forty minutes to one hour.

  1. When and under what circumstances were the first unions formed? Sketch the development of labor organizations before 1850. What special conditions did they meet in the United States?
  2. What, according to the Webbs, are the methods used by trade unions in actual operation? Discuss the Standard Rate and more briefly other trade union policies, stating your own conclusions.
  3. What are the special methods of scientific management in dealing with labor? How are wages determined? Are Trade Unionism and Scientific Management necessarily incompatible?
    State the general features of Profit-sharing plans as applied in the United States. Contrast this plan with that applied in Scientific Management plants.
  4. Contrast the methods of strike control applied by the United States Railroad Labor Board and The Canadian Industrial Disputes Investigation Act. Were these plans successful in operation? What features of either act do you think worthy of adoption in the United States?

Group II
Answer ALL questions; follow the order given.

  1. Describe the organization of the present union groups in the United States.
  2. A western state enacts a law providing:
    1. Children under 18 years of age shall not work more than seven hours a day, nor forty hours a week. These hours must be included between 7 a.m. and 5 p.m.
    2. Females over 18 years of age shall not be employed more than eight hours a day and forty hours a week. These hours must be included between 7 a.m. and 5 p. m.
    3. Males over 18 years of age shall not be employed over eight hours a day nor forty-four hours a week.

The act is attacked as unconstitutional. State the probably line of attack and defense. What do you think the present supreme court would decide on each of the three articles?

  1. To what extent can unemployment be prevented? Which of the methods proposed for the prevention of unemployment seem to you most practical and effective? Outline and justify a program for dealing with such unemployment as is not preventable.
  2. In 1923 the receiver of a certain railroad petitioned the Railroad Labor Board for authority to reduce wages below those paid by the railroads generally under rulings by the Board. It was shown that the railroad was not earning enough to cover operating expenses, that the stock and bond holders had received no return for several years, “that the necessity of a discontinuance of operations had been greatly threatened for some time,” and that “such shutdown of the carrier would be disastrous for the 31 counties of Kansas, Oklahoma and Texas through which its lines ran.” The workers decline to accept any reduction in pay and show that their incomes do not suffice to cover the cost of a living wage on a health and comfort standard. As a member of the railroad board render decision on this issue.
  3. (a) Suppose all workers were persuaded to join unions giving us a complete system of closed shops. What would be the effect on wages and social conditions generally?
    (b) Suppose the Open Shop drive should be completely successful and trade unionism reduced to local and partial organization. What results would follow?
  4. In what respects does a shop committee afford less adequate protection to the workers than does a trade union? What, if any, useful functions may a shop committee perform which are not now performed by trade unions?

Source: Harvard University Archives. Examination Papers Finals 1928 (HUC 7000.28, Vol. 70). Papers Printed for Final Examinations [in] History, Church History, … , Economics, … , Military Science, Naval Science, June, 1928.

________________________

Enrollment, Economics 6a1
Fall Term, 1928

[Economics] 6a 1hf. Dr. C. E. Persons.—Trade Unionism and Allied Problems.

Total 50: 1 Graduate, 22 Seniors, 21 Juniors, 3 Sophomores, 3 Other.

Source: Harvard University. Report of the President of Harvard College 1928-1929, p. 72.

 

Course Assignment for Reading Period
Economics 6a1
Fall Term, 1928

Economics 6a [Trade Unionism and Allied Problems.]

Select one of the following groups.

  1. Webb, S. & B.: History of Trade Unionism, Chs. I-IV incl., Chs. VII, VIII.
  2. Commons, John R. and Associates: History of Labour in the United States, Vol. II, pp. 3-194, 301-430, 521-541.
  3. Webb, S. & B.: Industrial Democracy, Pt. II, pp. 152-221, 279-353, 393-558.
  4. Hoxie, R. F.: Scientific Management and Labor, pp. 1-140.
    Burritt, A. W., et al.: Profit Sharing, Chs. I-VII incl. XI, XII, XIII, XVII. (1926 edition).
  5. Selekman, B.: Postponing Strikes. (Canadian Industrial Disputes Act.)
  6. Wolf, H. D.: The Railroad Labor Board, Pts. II, III.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 2, Folder “Economics, 1928-1929”.

1928-29
HARVARD UNIVERSITY
ECONOMICS 6a1
[Final Examination, Fall 1928-29]

Group I
Answer one. Forty minutes to one hour.

  1. Write brief essays on two of the following subjects:
    1. The origin of trade unionism in Great Britain.
    2. Trade Unionism under the Combination Laws.
    3. The “New Model” and its importance in trade union history.
  2. Write a summary history of the development of national trade unions in the United States. This should include the formation and development of the American Federation of Labor.
  3. Discuss the method of Collective Bargaining as practiced by the trade unions of Great Britain. Follow the exposition of the Webbs but do not fail to state your own conclusions.
    On what grounds have trade unions based their claims of a “right to a trade”? Discuss the attempts of the unions to settle demarcation disputes and the solution offered by the Webbs for dealing with this problem.
  4. (a) State definitely how scientific management proposes to handle questions which concern wage earners. Are these proposals necessarily incompatible with trade unions? What is to be said by way of critical comment of the following quotation: “(Scientific management) substitutes exact knowledge for guess work and seeks to establish a code of natural laws equally binding upon employer and workman.”
    (b) What are the essential features of profit sharing plans? What is, and what should be, the attitude of trade unions toward such proposals? How large is the promise of such plans regarded as aids in solving the labor problem?
  5. State, with some precision, the provisions of the Canadian Industrial Disputes Investigation Act. In what respect has the administration of the act departed from the intent of the authors? What is to be said of its success or failure? Its constitutionality? And its standing in the opinions of the wage earners, employers and the general public?
  6. State the important features of the law establishing the Railroad Labor Board, and of the act of 1926 which superseded it.
    Briefly summarize the work of the Railroad Labor Board, pointing out its successes and failure. What conclusions do you draw from this experience with governmental control of labor conditions.

Group II
Answer all questions: follow the order given

  1. Contrast the Knights of Labor and the American Federation of Labor. Include in your answer a clear statement of: plans of organization; program for the attainment of results; governing philosophy; and effectiveness as agencies to advance the interest of wage earners.
  2. A strike was declared against the Mills restaurants in Arizona by the Amalgamated Cooks and Waiters Unions. The strikers maintained pickets who appealed to cooks and waiters not to accept employment or to leave it if employed, and to customers not to patronize the restaurants. The pickets allege that the proprietors are “unfair to organized labor,” that hours are excessive and wages below the living standard. They picket in groups of six and employ vigorous, but generally peaceful, persuasion. There are minor cases of coercion and intimidation. The state has enacted laws declaring picketing legitimate and denying to the state courts the power to issue writs of injunction in labor disputes. The employers enter suits for damages against the union and attack the constitutionality of the law in both state and federal courts.
    Discuss these issues from the standpoint of legality, governmental policy and the legitimate exercise of trade union functions.
  3. Discuss the use of writs of injunction in labor disputes. Why has the employment of such writs become increasingly common and why have the trade unions vigorously opposed their use? What issues were involved in the Buck’s Stove case? The Bedford Stone decision?
  4. Does the introduction of machinery, e.g., the linotype machine or the automatic glass bottle machine benefit or injure: the wage earner, the capitalist and the consuming public? Answer both as to the immediate and the “long run” effect, and analyze the long run process of adjustment.
  5. A certain national building trade’s union established the following rules:
    1. Apprenticeship shall not begin before the age of 16 years and shall be four years long. The ratio of apprentices shall be: “one to each shop irrespective of the number of journeymen employed, and one to every five members thereafter.”
    2. A generally understood standard for a day’s work is in effect, which union members are expected not to exceed. This is based upon the average output of the union members when working without restriction.
    3. The introduction of new machines and processes is not opposed. However, the union insists that its members be given preference on the new machines, and that full union wages be paid. The industry pays to journeymen a straight time wage of 85 cents per hour; runs open shop though the great majority of the workers are union men and has been largely reorganized because of the invention and introduction of labor saving machinery.
      * *  *  *  *  *  *  *  *  *  *  * * *  *  *  *  *  *  *  *  *  *  *
      Discuss these union practices from the standpoint of industrial efficiency and social welfare. If in your opinion some of them are unsound or unreasonable, what steps would you recommend with a view of having them modified?
  6. Discuss the general subject of compulsory arbitration. Has it been successful in operation? Does it eliminate strikes? Strengthen or weaken trade unionism? Mean an increase or decrease in governmental control of industry? To what extent would you think it desirable that such a policy be adopted by our federal and state governments?
  7. What conclusion do you draw from your study of trade unionism? Is the movement worthy of support on its past record? Would you suggest modification of its plans or purposes? Do alternative plans such as company unionism seem to you of greater promise?

Source: Harvard University Archives. Mid-year Examinations, 1852-1943 (HUC 7000.55). Box 11: Examination Papers Mid-Years 1929. Papers Printed for Mid-Year Examinations [in] History, New Testament, … , Economics, … , Military Science, Naval Science, January-February, 1929.

________________________

Enrollment, Economics 6a2
Spring Term, 1929

[Economics] 6a 2hf. Dr. C. E. Persons.—Labor Legislation and Social Insurance.

Total 13: 4 Seniors, 6 Juniors, 2 Sophomores, 1 Other.

Source: Harvard University. Report of the President of Harvard College 1928-1929, p. 72.

 

Course Assignment for Reading Period
Economics 6b2
Spring Term, 1929

Economics 6b [Labor Legislation and Social Insurance.]

Select one of the following groups.

  1. Minimum Wage.

A. F. Lucas, The Legal Minimum Wage in Massachusetts. [The Annals of the American Academy of Political and Social Science, March 1927, Supplement]
—and either—
D. Self, The British Trade Board System.
—or—
M.B. Hammond, Wage Boards in Australia, Quarterly Journal of Economics, Vol. 29: pp. 98, 326, 563.

  1. Health Insurance.

Illinois Health Insurance Commission Report, pp. 1-168.
I.M. Rubinow, Standards of Health Insurance.

  1. Unemployment.

J. L. Cohen, Insurance Against Unemployment, pp. 159-332, 430, 494.
—and either—
W.H. Beveridge Unemployment a Problem of Industry, Chs. V, VIII, IX, XI.
—or—
H. Feldman, Regulation of Industry, Chs. V, VI, VIII, XIII, XIV, XVI.

  1. Old Age Provision.

1925 Report of the Massachusetts Commission on Pensions.
L. Conant, A Critical Analysis of Industrial Pension Plans, Chs. I, II, VII, VIII, IX, X.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 2, Folder “Economics, 1928-1929”.

________________________

Enrollment, Economics 342
Spring Term, 1929

[Economics] 34 2hf. Dr. C. E. Persons.—Problems of Labor.

Total 5: 1 Graduate, 3 Seniors, 1 Radcliffe.

Source: Harvard University. Report of the President of Harvard College 1928-1929, p. 72.

 

Course Assignment for Reading Period
Economics 342
Spring Term, 1929

Economics 34. [Problems of Labor.]

Individual reading assignments.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 2, Folder “Economics, 1928-1929”.

 

Image Source:  Sever Hall, Harvard University, ca. 1904. Library of Congress Prints and Photographs Division Washington, D.C.

Categories
Exam Questions Harvard Suggested Reading Syllabus

Harvard. Syllabus and Examination for International Trade. Haberler, 1949

 

The following course outline with readings and final examination for Gottfried Haberler’s 1949 (spring term) course in international trade can be compared to the following material transcribed earlier for the pair of semester courses he taught subsequently covering international trade, finance and policy.

__________________________

Course Announcement

Economics 243a (formerly Economics 143a). International Trade

Half-course (spring term). Mon., Wed., and (at the pleasure of the instructor) Fri., at 10. Professor Haberler.

[Economics 243 b (formerly] Economics 143b). International Trade]

Half-course (spring term). Mon., Wed., and (at the pleasure of the instructor) Fri., at 10. Professors Haberler and Harris.

Omitted in 1948-49; to be given in 1949-50.

 

Source: Harvard University Archives. Courses of Instruction, Box 6, Final Announcement of the Courses of Instruction offered by the Faculty of Arts and Sciences for the Academic Year 1948-49, p. 79.

__________________________

Course Enrollment

[Economics] 243 a (formerly Economics 143a). International Trade (Sp). Professor Haberler.

Total: 25: 15 Graduates, 1 Senior, 4 Public Administration, 1 M.I.T., 4 Radcliffe.

 

Source: Harvard University. Report of the President of Harvard College, 1948-1949, p. 78.

__________________________

Spring 1949
Economics 243a
Professor Haberler

Outline

First Four Weeks

  1. The Importance of International Trade for the Economy of Various Countries. Measures of Importance
  2. International Accounts and National Accounts.
    International Transactions in National Economic Budgets
  3. Balance of Payments and Foreign Exchange
    Demand and Supply for Exports and Imports
    Demand and Supply of Foreign Currency
  4. Balance of Payments Mechanism
    The Transfer Problem

Second Four Weeks

  1. International Division of Labor
    The Theory of Comparative Cost
  2. Ohlin’s Theory of “Interregional and International Trade”
  3. Various Criticisms and Objections to Classical and Neoclassical Theories
  4. Location Theory

Last Four Weeks

  1. The last four weeks will be devoted to a discussion of problems of trade policy. Evolution of trade policies; Modern methods of trade regulation; The Havana Charter for an International Trade Organization (I.T.O.).

 

Reading Assignments and Suggestions
General

The literature in the subject is so rich that students can acquire the knowledge necessary for the course in many different ways. Students are invited to make their own detailed choice from the suggestions below. Two extensive bibliographies have been prepared in former terms for other courses. One may be obtained from Ms. Buller, Littauer 322; the other from Professor Williams’ secretary, Littauer 231. Each student is expected to have read one or the other of the following general monographs or texts:

Ellsworth: International Economics
Haberler: Theory of International Trade
Whale: International Trade
Enke and Salera: International Economics
Meade and Hitch: Introduction to Economic Analysis and Policy (Part III)
Harrod: International Economics (3rd edition, 1939)
Tinbergen: International Economic Cooperation (1945)
An excellent discussion of recent developments will be found in: Metzler: “The Theory of International Trade,” Chapter. 6, Survey of Contemporary Economics (1948)
It is hoped that the volume, Readings in the Theory of International Trade will appear in March or April.

Assignments and Suggestions to Subjects Listed Above in Addition to Relevant Chapters in General Texts

  1. There is hardly any specific reading on this subject. See, however, The Post-War Foreign Economic Policy of the United States. 6th Report of the House Special Committee on Post-War Economic Policy and Planning. House Report No. 541. Washington, 1945. (This report was written by Lloyd Metzler.)
    The United States in the World Economy, U. S. Department of Commerce, 1943.
    Buchanan, N.S., and Lutz, E.A.: Rebuilding the World Economy, 1947)
  2. Hicks: The Social Framework of the American Economy, Ch. XII, “Foreign and National Income.”
    The United States in the World Economy (U.S. Department. of Commerce, 1943).
    The Survey of Current Business (Monthly publication of Department of Commerce) has frequent articles on trade and balance of payments statistics.
  3. R. Nurkse: International Currency Experience (League of Nations, 1944).
    J. Robinson: “Foreign Exchanges,” Essays on the Theory of Employment (1st ed., 1938; 2nd ed., 1947), Part III.
    Machlup: “The Theory of Foreign Exchanges,” Economica, 1939 (two articles).
    Pigou: “The Foreign Exchanges,” Quarterly Journal of Economics, November, 1922, Reprinted in Essays in Applied Economics, 1927.
    Metzler: op. cit.
  4. Williams: Post-War Monetary Plans and Other Essays, 3rd edition, 1947.
    The New Economics (ed. S. E. Harris), Part V, especially the essays by Bloomfield and Nurkse.
    Machlup: International Trade and the National Income Multiplier (1943).
    Keynes and Ohlin on German Reparations in Economic Journal, 1929 (to be reprinted in Readings in the Theory of International Trade).
  5. In addition to general texts, see: Ricardo: Principles; J. S. Mill, Principles
    Marshall: Money, Credit and Commerce
    Taussig: International Trade
    J. Viner: Studies in the Theory of International Trade
    Leontief: “The Use of Indifference Curves in the Analysis of Foreign Trade,” Quarterly Journal of Economics, May, 1933 (to be reprinted in Readings).
  6. Ohlin: op. cit. Parts I, II, and possibly III.
    Ellsworth: “A Comparison of International Trade Theories,” American Economic Review, June, 1940.
  7. J. Viner: Studies (last two chapters).
    F. D. Graham: Theory of International Values (Princeton 1948).
    Williams: Postwar Monetary Plans, 3rd ed., 1937, Ch. 12.
  8. E. Hoover: Location of Economic Activity (Economic Handbook, ed., S.E. Harris, 1948).
    Relevant chapters in Ohlin, op. cit.
  9. Buchanan and Lutz: op. cit.
    Foreign Economic Policy for the United States (ed., S.E. Harris, 1948).
    M. Gordon: Barriers to World Trade (description of trading methods).
    Clair Wilcox: A Charter for World Trade, 1949.
    Text of I.T.O. Charter

Further assignments for 9 to be made later.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1). Box 5, Folder “Economics 1949-1950, 3 of 3”.

_____________________

1948-49
HARVARD UNIVERSITY
ECONOMICS 243a
[Final Examination]

Answer 4 questions

(Please write legibly!)

  1. Analyze the probably effect of a currency depreciation of a particular country upon (a) the balance of payments and (b) the terms of trade. List the main factors on which the outcome depends and give attention to income as well as to price effects.
  2. List and discuss the main theoretically tenable arguments for protection. Indicate their order of importance (a) from the scientific point of view and (b) from the point of view of practical politics.
  3. Describe Ohlin’s theory of International Trade and compare it with the classical and neo-classical theory.
  4. “The existence of a large home market in the U.S. protected by taste, connections, and a high tariff, which enables the development of mass-production methods, secures advantages which cannot be challenged except by countries having complete state monopoly of their foreign trade. This makes it impossible for Western Europe to adopt a policy of nondiscriminatory trade using no protective devices except tariffs.” (Th. Balogh) Discuss and analyze.
  5. Discuss the probable influence of international trade upon the distribution of income, say, between labor and non-labor income. Pay attention to the theories of Heckscher-Ohlin, Stolper-Samuelson and L. Metzler.
  6. After World War I, Germany had to pay reparations and the Western allies had to pay debts to the United States. After World War II, the corresponding problem for Europe is to get along without American aid.
    Analyze the possible mechanisms of adjustment, indicating the similarities and differences of the two cases.

 

Source: Harvard University Archives. Harvard University. Final examinations, 1853-2001. Box 16, Papers Printed for Final Examinations [in] History, History of Religions, …, Economics, …, Military Science, Naval Science, June, 1949.

Image Source: Gottfried Haberler in Harvard Class Album, 1950.

 

 

Categories
Cambridge Exam Questions Gender

Cambridge. Local Examinations Syndicate’s Political Economy and Logic Exams, 1870-72

This post provides three years’ worth of exams for the subjects of political economy and logic that constituted Group D of a battery of exams created and graded by fellows and tutors of the University of Cambridge that were taken by women wishing to become teachers and needed to have their educational achievements certified. The volume from which the following information has been transcribed covers the period 1870-1872. Miscellaneous examination rules/procedures and examiners’ reports have been included as well. Texts by John Stuart Mill,  John Elliott Cairnes and Adam Smith were the primary material for the political economy examinations with John Stuart Mill’s Logic and works by Richard Whately, William Thomson and Alexander Bain covered in the logic examinations.

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Backstory of the University of Cambridge Local Examinations Syndicate.

Cambridge Assessment was established as the University of Cambridge Local Examinations Syndicate (UCLES) by the University of Cambridge in 1858. [It was] set up to administer local examinations for students who were not members of the University of Cambridge, with the aim of raising standards in education. [UCLES] also inspected schools.

[…]

1858

UCLES, The University of Cambridge Local Examinations Syndicate was formed to set school leaving examinations for non-members of the university. The Syndicate comprised thirteen university academics (one as Secretary) who would set regulations, write question papers, preside over examinations, mark scripts and make the awards. The examinations were held in December to avoid conflict with the Oxford Examinations in July and the first centres were in Birmingham, Brighton, Bristol, Cambridge, Grantham, Liverpool, London and Norwich.

1862

It was decided that the Syndicate’s remit be extended to offer inspections to schools as part of the examination programme offered by the University of Cambridge.

1864

The first overseas examinations were held by UCLES in Trinidad where six candidates took the Cambridge Senior Examinations.

1868

After a successful trial in 1863 by candidates from the North London Collegiate School and a subsequent petition to the University, girls were officially allowed to enter for the Cambridge Local Examinations on the same basis as boys.

1869

The Higher Local Examinations were introduced, initially for women over eighteen who wished to become teachers. Although the HLE was discontinued in 1922 it had, by then, spawned the Certificate of Proficiency in English, the longest surviving of all UCLES examinations.

http://web.archive.org/web/20200719152624/https://www.cambridgeassessment.org.uk/about-us/who-we-are/our-heritage/

____________________________

University of Cambridge. Examination for Women.
Examination Papers for the Examination held in July, 1870
with lists of Syndics and Examiners
to which are added the Regulations for the Examination in 1871.

Cambridge: Printed at the University Press, 1870.

https://archive.org/details/examinationforw00unkngoog/page/n7/mode/2up

EXAMINATION FOR WOMEN.
[p. 4]

The following Scheme of Examinations for Women was sanctioned by Grace of the Senate, Oct, 29, 1868.

  1. That an Examination be held once in every year for women who have completed 18 years of age before the 1st of January of the year in which the Examination takes place.
  2. That this Examination be under the superintendence of the Syndicate constituted by Grace of the Senate February 11, 1858 for the conduct of the Examinations of Students who are not members of the University.
  3. That the Examinations be held in such places as the Syndicate may approve.
  4. That the Candidates be required to pay fees at the discretion of the Syndicate.
  5. That every Candidate be examined in Religious Knowledge unless she declare in writing her objection to such Examination.
  6. That neither the names of the Candidates nor any Class Lists be published.
  7. That the Candidates who have satisfied the Examiners receive Certificates, and those who have passed the Examination with credit. Certificates of Honour.
  8. That this Scheme continue in force for three years, so as to include the Examinations of 1869, 1870, and 1871.

RECOMMENDATIONS TO LOCAL COMMITTEES.
[p. 7]

  1. The Examination room must be large enough to accommodate all the Candidates.
  2. Desks must be provided so as to allow to all the Candidates at least four feet in length apiece, without requiring them to be seated on opposite sides.
  3. The desks for drawing must be so placed that the Candidates may have the light upon their left hand, unless the room be lighted from the top.
  4. A table in each of the Examination rooms, and one drawer or cupboard furnished with lock and key, will be required for the use of the Examiner.
  5. Pens, ink, writing and blotting paper must be provided. The paper must be of the size called “Cambridge Scribbling Demy.” Each sheet should be cut in four, and may be ruled or not. If ruled, the ruling of each quarter-sheet should be parallel to the shorter sides. Paper of this size can be procured from Spalding and Hodge, 145, Drury Lane; King and Loder, 239, Thames Street; Batty, Partington and Son, 174, Aldersgate Street, London; and from all Stationers in Cambridge.
    The quarter-sheets must have a hole punched in the left-hand top corner, and pack thread or the metal binders sold by Perry and Co. should be provided in order to fasten each student’s papers together.
  6. The Local Committee should arrange so that at least one of their number may attend in the Examination room.
    The writing-paper, &c. should be distributed for the use of the Candidates ten minutes before the hours fixed for the commencement of work.

Examiners for Political Economy and Logic for July 1870
[p. 6]

The following gentlemen were appointed by the Syndicate

Examiner in Political Economy for July 1870:  Rev. J. B. Mayor, M.A. late Fellow of St. John’s College.

Examiner in Logic: Ref. F. J. A. Hort, M.A. late Fellow of Trinity College.

Examination Questions for July, 1870

GROUP D.
Thursday, July 7, 1870. 4 to 6 ½

Political Economy.
[p. 50]

  1. Classify the advantages derived from Division of Labour.
  2. Distinguish between Price, Cost, Value in Use, and Value in Exchange. On what does the last depend?
  3. Examine the consequences of the substitution of machinery for hand labour in general, and particularly in the case of agriculture.
  4. Give an account of Cottier Tenure, explaining what is meant by Conacre and Tenant Right.
  5. Give a short account of the English Poor Law at the present time. What objections have been made to it?
  6. What are the principles which should guide the practice of Almsgiving?
  7. What are the uses of a Circulating Medium? Point out the mischiefs arising from its depreciation. What were the French Assignats?
  8. The use and abuse of Trades Unions.
  9. What regulates International Values?
  10. Discuss whether the expenses of a war should be met by Loan or Tax.
  11. Mention the principal errors of the Political Economists who preceded Adam Smith.
  12. The influence of Political Economy upon English legislation during the last forty years.

 

Wednesday, July 6, 1870. 12 to 2.

Logic.
[p. 51]

  1. Distinguish the several uses of language for purposes of thought. What are meant by First and Second Intentions?
  2. In what sense have words been compared to counters? Shew to what extent the comparison is just, and where it is misleading.
  3. What is meant by Division in Logic? State and exemplify its rules. Give instances of cross-division.
  4. Explain the saying that the subject of a judgement is in the predicate, and the predicate in the subject. Point out the various aspects of the double relation here intended.
  5. Explain and exemplify the Fallacy of Interrogation. What is meant by its being classified as a Fallacy of Ambiguous Middle?
  6. A. “The sky is cloudy; so we may expect rain.” B. “Yet it has been cloudy for some days, and not a drop has fallen.” A. “All the more reason for the rain to come now.” Put these three arguments into a logical form, supplying whatever is assumed; and examine the validity of each.
  7. What do you understand by Deduction, and what is its use in scientific investigation?
  8. Describe the characteristics of Empirical Laws. Why are they called laws, and why empirical?
  9. What are the respective advantages of observation and experiment?
  10. Explain distinctly what is meant by a classification according to Natural Groups. How is such a classification related to the classification involved in all use of general names?

Regulations for the Examination in 1871.
[pp. 63-66]

UNIVERSITY OF CAMBRIDGE.
EXAMINATIONS FOR WOMEN.

There will be an Examination, commencing on Monday, July 3, 1871, open to Women who have completed the age of 18 years before Jan. 1, 1871.

Candidates will be examined in such places as the Syndics appointed by the University may determine.

The Syndicate will entertain applications from places where 25 fees at the least are guaranteed. Application must be made not later than April 1, 1871.

Before any application for an Examination can be approved, the Syndicate must be satisfied as to the following points:—

That there is a Committee of ladies who will efficiently superintend the Examination, one of whom will undertake to act as Local Secretary.

That this Committee will see that suitable accommodation can be obtained by Candidates who are strangers to the place.

That a responsible person will be at hand to receive the Examination papers from the conducting Examiner and collect the answers.

Committees wishing to have Examinations held in their several districts, may obtain all necessary information from the

Rev. G. F. BROWNE.
St Catharine’s College, Cambridge.

*  *  *  *  *  *  *  *  *  *

  1. Every one admitted to Examination will be required to pay a fee of forty shillings. After a Certificate has been obtained, the fee in any subsequent year will be twenty shillings.
  2. Papers will be set in the subjects grouped and numbered as below. Every Candidate who has not already passed in group A is required to satisfy the Examiners in all the papers set in that group, with the exception that the papers in Religious Knowledge may be omitted by any Candidate who at the time of her application for admission to the Examination declares her objection to be examined in Religious Knowledge.
  3. The Candidates who satisfy the Examiners will receive Certificates to that effect, and those who pass the Examination with credit, Certificates of Honour. Every Certificate will specify the subjects in which the Candidate has passed.
  4. No Certificate will be granted to any Candidate who has not passed in group A and also in one of groups B, C, D and E.
  5. The names of the Candidates who pass in each group will be placed alphabetically in three classes. If a Candidate specially distinguishes herself in particular parts of the Examination, the fact will be notified by endorsement on her Certificate. After each Examination notice of the result will be sent to the home of each Candidate.
  6. A Candidate who passes in group A, but not in the further subjects necessary for obtaining a Certificate, will not be examined in the papers in that group in any future year in which she may go in to the Examination for the purpose of obtaining her Certificate.
  7. No Candidate will be examined in more subjects than the subjoined Time-table will allow.
    After passing in group A, Candidates may be examined in other groups in subsequent years.
    A schedule of books recommended by the Syndicate is appended to each group. But it is to be understood that such schedules are not intended to limit the studies of the Candidates or the range of questions in the papers set by the Examiners.

GROUP A.

  1. *Religious Knowledge.
  2. Arithmetic.
  3. Outlines of English History from the Norman Conquest to the reign of George IV. inclusive. Detailed knowledge of the period from the accession of Charles I. to the death of Cromwell will be required. A knowledge of Geography, so far as it bears on this subject, will be expected.
  4. *English Language and Literature.
  5. Every Candidate in this group will be required to write a short English Composition.

*The papers in these subjects may be taken again in subsequent years by Candidates who wish to obtain distinction in them.

GROUP B.

1. Latin. 2. Greek. 3. French. 4. German. 5. Italian.

Passages will be given for translation into English from the books mentioned in the subjoined schedule, and questions will be set on the language and subject matter of the books. In each language passages will be given for translation from some other authors, and passages of English prose for translation into each.

A knowledge of one of the five languages will enable Candidates to pass in this group. For a Certificate of Honour a knowledge of two will be required.

In the papers in French and Italian, the connexion between these languages and Latin will be included; but a knowledge of Latin will not be insisted upon as necessary for either the Pass or the Honour Certificate.

GROUP C.

  1. Euclid, Books I. II. III. IV. VI. And XI. to Prop. 21 inclusive.
  2. The elementary parts of Algebra; namely, the Rules for the Fundamental Operations upon Algebraical Symbols, with their proof; the solution of Simple and Quadratic Equations; Arithmetical and Geometrical Progression, Permutations and Combinations, the Binomial Theorem and the principles of Logarithms.
  3. The elementary parts of Plane Trigonometry, so far as to include the solution of Triangles.
  4. The simpler properties of the Conic Sections, treated either geometrically or analytically.
  5. The elementary parts of Statics, including the equilibrium of Forces acting in one plane, the properties of the Centre of Gravity, the laws of Friction, and the Mechanical Powers.
  6. The elementary parts of Astronomy, so far as they are necessary for the explanation of the more simple phenomena.
  7. The elementary parts of Dynamics, including the laws of Motion, Gravity, and the Theory of Projectiles.

A knowledge of the first two of these subjects will be required to enable a Candidate to pass in this group. For a Certificate of Honour, a knowledge of two at least of the remaining five will be required in addition.

GROUP D.

1. Political Economy. 2. Logic.

A knowledge of one of these subjects will enable a Candidate to pass in this group. For a Certificate of Honour, a knowledge of both will be required.

GROUP E.

1. Botany. 2. Geology and Physical Geography. 3. Zoology. 4. Chemistry (theoretical and practical).

A knowledge of one of these subjects will enable a Candidate to pass in this group. For a Certificate of Honour, a knowledge of two of them will be required.

GROUP F.

1. Music 2. Drawing.

A paper will be given in the latter subject containing questions on the History of Art

Every Candidate in Drawing is required to bring with her to the Examination one finished drawing, or painting, executed by herself, of such a kind as may best shew her proficiency, and which must be described as a “study from Nature,” an “original drawing,’* or a “copy from a drawing,” as the case may be.

Two hours will be allowed for a sketch, or copy, of some portion or detail of the above work, and this exercise will be judged with the finished work.

The sketch together with the finished drawing will be sent to the Examiner in Drawing. The latter will he returned to the Candidate after inspection by him.

Candidates will also be required to draw from a model.

Proficiency in these subjects will not count towards a Certificate, but will be notified on the Certificate in cases where the Candidate obtains one.

[…]

[Readings for 1871 Examinations]

“It may be expected that about two-thirds of the questions set in each paper will have reference to the books mentioned under the Group to which it belongs.”

[…]

GROUP D.

  1. Mill, Political Economy. Adam Smith, Wealth of Nations.
  2. Mill, Logic. Thomson, Outlines of the Laws of Thought. Whately, Logic, Books II. and III. with App. 2.

[…]

DIRECTIONS TO CANDIDATES.
[p. 69]

  1. Be at your seat in the Examination Room five minutes before the time fixed in the preceding table for the Examination in the several subjects.
    [Note: For Group D, Logic and Geology examinations scheduled for Wednesday July 5 (1871) 12 to 2; Political economy and German examinations scheduled for Thursday, July 6 (1871), 4 to 6 ½.]
  2. Write your index number in the right-hand top corner (not the one with the pinched hole) of every sheet of paper which you use, and your name as well as your number on the first sheet of each set of papers.
  3. Write only on one side of the paper. Fill each sheet before you take another. Leave a blank space after each answer.
  4. Answer the questions as nearly as you can in the order in which they are set, and write the number of each question before the answer.
  5. As soon as notice is given (which will be five minutes before the end of the time allowed), arrange your papers in proper order, so that the first page may be at the top, see that they all have the number by which you are known written upon them, fasten them according to the direction of the Examiner, and give them unfolded to him.
  6. No Candidate can be allowed to give up her papers and leave the room until half an hour has expired from the time at which the papers are given out. A paper will not be given to any Candidate who is more than half an hour late.
  7. No Candidate can be allowed to remain in the Examination Room after her paper is given up to the Local Examiner.

____________________________

UNIVERSITY OF CAMBRIDGE

EXAMINATION FOR WOMEN
ABOVE EIGHTEEN YEARS OF AGE

Report of the Syndicate Presented to the Senate, Oct. 30, 1871 with Supplementary Tables.

Cambridge: Printed at the University Press, 1871.

https://archive.org/details/examinationforw00unkngoog/page/n89/mode/2up

GROUP D
Political Economy, Logic
[p. 4]

Number of candidates: 13

Passed in Class I: 2

Passed in Class II: 4

Passed in Class III: 5

Failed: 2

Examiners’ Comments
[p. 7]

Logic. The Examiner finds fault with the manner in which the answers were given. They were marked by a lack of decision and of terseness of expression, arising probably from the want of practice in writing out the answers to definite questions. Some Candidates wasted time in giving reasons for their inability to answer parts of the questions.

Political Economy. The Examiner reports as follows:—I think the examination in Political Economy very satisfactory on the whole. I have met with no brilliant or striking performance; but the majority of papers gave evidence of conscientious and intelligent study of the subject, and shewed an apprehension of principles lively and clear as far as it went, though not profound. There was rarely any irrelevance in the answers; but I noticed sometimes a want of proportion, a disposition to dilate at length on comparatively unimportant points, against which it may be worth while to warn Candidates.

____________________________

University of Cambridge. Examination for Women.

Examination Papers for the Examination held in July 1871
with lists of Syndics and examiners
to which are added the Regulations for the Examination in 1872.

https://archive.org/details/examinationforw00unkngoog/page/n107/mode/2up

Examiners for July 1871
[p. 8]

Logic:  [no one named]

Political Economy: [no one named]

Examination Questions for July 1871
GROUP D
[pp. 46-49]

Thursday, July 6, 1871. 4 to 6½.
Political Economy

  1. Define Labour. Distinguish Productive/Unproductive Labour.
    Under which head would you class the labour of (1) Professors, (2) Policemen?
    Examine the causes of the difference of wages in different employments: explaining, for the sake of illustration,

    1. The low average wages of poets, governesses, plough-boys,
    2. The high average wages of solicitors and navvies.
  2. Why do we pay no wages to Members of Parliament?
  3. Define Capital. Is champagne ever Capital? Is the stock of a theatre? Explain carefully, with whatever qualifications appear necessary, the principle
    “That demand for commodities is not demand for labour.”
    Why then are wages high when trade is good? and what would be the loss to Paris if the spendthrifts of Europe ceased to go there for amusement?
  4. Explain how the kind of wealth produced, and the place and manner of its production, are determined under a system of Free Competition. It has been sometimes thought that the mode of employing capital which would most benefit individual capitalists does not always coincide with that which would most benefit the state. Discuss briefly any opinions of this kind with which you are acquainted, and any legislative measures to which they have given rise.
  5. Explain the distribution of wealth under a system of Free Competition. Mention any other methods of distribution that have historically existed or have been recently proposed: and discuss the advantages and disadvantages of the latter.
    If the Metayer system were suddenly made compulsory in England, what would be the probable effects?
  6. Compare Rent with the profit gained by a patent, and that gained by a monopoly.
    It has been said that what is ordinarily called rent is really profit on the capital that has been employed in reclaiming and improving land. Discuss this assertion.
  7. Explain how, and to what extent, Exchange value can be said to be determined both by cost of production and by supply and demand. How is the value (1) of partridges, (2) of mutton, determined in England at present?
    Why is there anything peculiar in the determination of the value of foreign commodities? Sketch the probable effect on our trade with France of an immense discovery of coal in that country.
  8. Discuss the changes in the relative values of different articles, due to the progress of European civilization up to the present time: inquiring how far they are to be explained by general laws and how far by special circumstances. What similar changes are to be expected in the future?
    Illustrate by referring to bullion, com, beef, cloth.
  9. What restrictions are at present imposed on the lending of money or credit? Mention any other restrictions that have actually existed or have been proposed. Discuss the advisability of any of these restrictions.
  10. Give general principles of taxation: and apply them to determine the propriety of

(1) The Income-tax as it at present exists.
(2) The Malt-tax.
(3) A tax on matches.

 

Wednesday, July 5, 1871. 12 to 2.
Logic

  1. Why has the name of Organon been given to Logic? A recent treatise on Logic has been described as “based on a combination of the Old and the New Organon”: what do you understand by this?
  2. Logic is “the science of the operations of the understanding which are subservient to the estimation of evidence.” Is this definition co-extensive with Thomson’s? Does it appear to you a satisfactory one?
  3. What is Language? Shew by examples how it enables us to analyse complex impressions, and to abbreviate the processes of thought.
  4. What is “a system of cognate genera”?
  5. Give an account of the controversy between the Nominalists and the Realists, and explain what is meant by describing it as a question of Method rather than of Metaphysics.
  6. Interpret the judgment — No tyranny is secure — according to Extension, Intension, and Denomination.
  7. What is meant by the Quantification of the Predicate? What are its advantages?
  8. Shew the use of the lines commencing Barbara. Construct examples of Camestres and Bokardo, and reduce them to the First Figure. Discuss the propriety of retaining the Fourth Figure, and the necessity of rules for the reduction of the Second and Third Figures.
  9. Explain and exemplify the fallacy of Division, and that of Composition. To what class are they to be referred? In what way does the ambiguity of the word all sometimes give occasion to one of these fallacies?
  10. Test the following by logical rules:
    1. If the parks were closed, some persons would be aggrieved: but the parks are not closed, therefore no persons are aggrieved.
    2. It is possible that John may come to-morrow ; it is very probable that William will come to-morrow ; it is absolutely certain that Thomas will come to-morrow; therefore it is probable that John, William, and Thomas will come to-morrow.
  11. What is a Law of Nature? When may a Law of Nature be said to be explained? ls it possible that all the sequences of nature will ultimately be resolved into one law?
  12. Discuss one of the following questions: —
    1. What makes “the Exact Sciences” exact?
    2. Are the methods of physical inquiry applicable to moral and political phenomena?
    3. Is it desirable for a scientific man to have a lively imagination ?

Readings for 1872 Examinations
GROUP D
[p. 64]

1. Political Economy. 2. Logic.

1. Mill, Political Economy. *Cairnes, Logical Method of Political Economy. *Adam Smith, Wealth of Nations(McCulloch’s edition).

2. Mill, Logic [Omitting the following: Book I. ch. 3 (except §1); Book II. Ch. 4-7; Book III. Ch. 5 §9 and note, ch. 12, ch. 18, ch 23, ch. 24 (except §1,2); Book V. ch. 3 §3-6; Book VI. Ch. 2]. Whately, Logic, Books II. And III. With App. 2. *Thomson, Outlines of the Laws of Thought. *Mansel, Prolegomena Logica. *Bain, Inductive and Deductive Logic.

___________________

UNIVERSITY OF CAMBRIDGE
EXAMINATION FOR WOMEN

Examination Papers For the Examination Held in June 1872
to which are added The Regulations for the Examination in 1873.

https://archive.org/details/examinationforw00unkngoog/page/n178/mode/2up

Examiners for June 1872
[p. 8]

Logic: Rev. J. B. Pearson, M.A., Fellow of St John’s College.

Political Economy: Rev. W. M. Campion, M.A., Fellow and Tutor of Queen’s College.

Examination Questions for June 1872
GROUP D
[pp. 51-54]

Wednesday, June 19, 1872. 12 m. to 2 p.m.
Logic

  1. Assuming that Logic is correctly defined as ‘the Science of the Laws of Formal Thinking,’ investigate the relation between Logic and Psychology, and between Logic and Grammar.
  2. Discuss briefly from Mill’s point of view the statements (a) that Logic is entirely conversant about language, (b) that it is the art of discovering truth, (c) that it is an a priori
  3. How does Mill distinguish between abstract and concrete terms? Is the distinction as drawn by him identical with that drawn by Thomson between abstract and concrete representations? Does he regard adjectives as abstract or concrete?
  4. Give an account of the logical processes known by the name of Conversion.
  5. Construct original concrete syllogisms in Festino, Darapti, Bokardo. Express each according to Hamilton’s method of notation. Reduce them to the First Figure, explaining how the various letters in the words guide you in doing so.
  6. Explain the terms Dilemma, Enthymeme, Sorites, Differentia, Cross-division, Undistributed Middle, Petitio Principii.
  7. ‘The sole invariable antecedent of a phenomenon is probably its cause.’ Of which of Mill’s four methods of Experimental Inquiry is this a statement? Discuss its utility as an instrument for the investigation of Nature.
  8. Distinguish between the Terminology and the Nomenclature of a science. Can the Terminology of a science be satisfactory, when its Nomenclature is unsatisfactory ?
  9. How does Mill classify Fallacies? Give an account of the class under which he includes ‘attempts to resolve phenomena radically different into the same.’
  10. Give Bain’s account of the method of arranging a ‘Science of Classification.’
  11. State the following arguments in simple and complete logical form, test them by recognised logical rules, and give the name of the argument or fallacy as the case may be:
    (a) His imbecility of character might have been inferred from his proneness to favourites; for all weak princes have this failing.
    (b) Improbable events happen almost every day; but what happens almost every day is a very probable event ; therefore improbable events are very probable events.
    (c) By what means did he gain that high and honourable place? Certainly not by integrity and devotion to duty, for unfortunately many consummate scoundrels are successful applicants for such posts of trust.
  12. Give the heads of such an essay as you would write in two hours upon the application of the Deductive Method to the Science of Society.

Thursday, June 20, 1872. 4 to 6½.
Political Economy

  1. What is the province of Political Economy? What definitions of the science have been suggested? State which you prefer, and give reasons for your preference.
  2. State the requisites of production; and distinguish between productive and unproductive labour.
    How would you class the labour of Actors, Literary Lecturers, Professors, Barristers?
  3. Define Capital, fixed Capital, circulating Capital.
    What phenomena may be expected to be exhibited during the rapid conversion of circulating Capital into fixed Capital and to that conversion?
  4. Establish the principle:
    “Demand for commodities is not demand for labour.”
    Can you mention any case in which this principle is not applicable?
  5. Examine the effect on production caused by the separation of employments.
    Account for the different rates of wages in different employments, and for the different rates of gross profits in different trades.
  6. What was “the mercantile system”?
    Give a brief account of the agricultural systems of Political Economy as they are described by Adam Smith.
  7. State Ricardo’s theory of rent. What objections have been made to it? Examine their validity. How does Adam Smith’s theory of farm-rents differ from Ricardo’s?
  8. “It may and often does happen that a country imports an article from another, though it might be possible to produce the imported article with less cost in the importing country than in that from which it is imported.”
    How do you explain this seeming paradox?
  9. What is the Malthusian doctrine of population?
    What result do you consider would follow in England if the mortality among young children of the labouring class were very materially reduced?
  10. “Ireland pays dearer for her imports in consequence of her absentees.”
    Establish this proposition.
  11. Discuss the policy of the English poor-law from an economical point of view.
  12. “There are no public institutions for the education of women, and there is accordingly nothing useless, absurd, or fantastical in the common course of their education.”
    What was Adam Smith’s opinion with respect to endowments for educational purposes? To what extent do you conceive that he was influenced in making the foregoing statement by his individual experience?
  13. Discuss one of the following assertions:

(1) A country will always have as much pauperism as it chooses to pay for.
(2) Educational endowments are employed more advantageously in assisting learners than in paying teachers.

Readings for 1873 Examinations
GROUP D
[pp. 67-68]

1. Political Economy. 2. Logic.

A knowledge of one of these subjects will enable a Candidate to pass in this group. For a Certificate of Honour, a knowledge of both will be required.

1. Mill, Political Economy. *Cairnes, Logical Method of Political Economy. *Adam Smith, Wealth of Nations(McCulloch’s edition).

2. Mill, Logic [Omitting the following: Book I. ch. 3 (except §1); Book II. Ch. 4-7; Book III. Ch. 5 §9 and note, ch. 13, ch. 18, ch 23, ch. 24 (except §1,2); Book V. ch. 3 §3-6; Book VI. Ch. 2]. Whately, Logic, Books II. And III. With App. 2. *Thomson, Outlines of the Laws of Thought. *Bain, Inductive and Deductive Logic.

 

Source: Excerpts from several University of Cambridge Local Examinations Syndicate publications.

 

Categories
Cambridge Exam Questions

Cambridge. Examinations in political economy, 1872-1873.

 

Another set of political economy exams from almost 150 years ago. Cf. the 1868-1872 examination questions from Harvard.

_____________________

19th Century Cambridge examinations in political economy
posted at Economics in the Rear-view Mirror

Cambridge University examination papers, Michaelmas term, 1871 to Easter term, 1872.

_____________________

CAMBRIDGE UNIVERSITY EXAMINATION PAPERS
MICHAELMAS TERM, 1872 TO EASTER TERM, 1873.

From the MORAL SCIENCES TRIPOS.

TUESDAY, Nov. 26, 1872. 1 to 4.
POLITICAL ECONOMY.

  1. If a person saves and hoards ten thousand sovereigns, or a thousand ten pound notes, does his action in either case tend to increase the wealth of the country? Give reasons for your answer.
    A person receives an annuity of £1000, but uses for his personal expenses only £500, saving the rest; shew either by a mathematical formula, or by a general explanation, that after a certain number of years the country will begin to be enriched by his means, but not earlier.
  2. Why does skilled labour command a higher price than unskilled? Shew that there are two causes, one necessary and permanent, the other depending on the circumstances of the society; and find the condition for the existence of the latter.
  3. Assuming that in a system of large farming, labour is more productive than in a system of small farming; shew that a country of small farms may nevertheless support both a larger total population, and also a larger manufacturing and commercial population, than the same country would support under the other system; and find the condition of either result.
    Are there any causes which might render the labourer more productive where labour in the abstract is less so? Shew however that the truth of the above proposition does not depend on this distinction.
  4. Enunciate the principle of free trade; and examine whether there are any exceptions to the generally beneficial effects of free trade on both the countries concerned, either from economical or from political causes.
  5. Shew that a landlord cannot indemnify himself for a tax upon rent by raising its amount. Can you suggest reasons why this proposition would be much less true in a rudimentary than in a highly developed state of society, even supposing the two states to be absolutely alike in respect of the security of property?
    How far is the above proposition true of the landlord of a house?
  6. Shew that every commodity permanently offered for sale has a minimum average price; and examine in what case the price will exceed this minimum, and by what it is then determined.
    Two cloth manufacturers, A and B, start each with a capital of £10,000. A, who invests £2500 of his capital in permanent machinery, sells his cloth at 8s. 6d. a yard. B‘s machinery is similar to A‘s, but turns out inferior work, and costs only £1000. If profits are 10 per cent, shew that B‘s cloth will sell for 8s. 4d. a yard.
    If the machinery, instead of being permanent, wears out in a year, shew that B‘s cloth will sell for 7s. 1d. a yard.
  7. In what case is an inconvertible paper currency detrimental to a country? what is the sign of its being detrimental? and to whom is the detriment done?
  8. Quote instances to shew, that the rate of wages has very much less influence on the cost of production than might at first sight appear.
  9. Ricardo observes that a country may import commodities which it has the means of making much cheaper at home. Shew how this is theoretically possible, without assuming ignorance or negligence on the part of the importing nation: and at the same time give reasons for the extreme rarity of the occurrence as a matter of fact.
  10. Describe the means by which the transactions of international commerce are carried on with the least possible waste in the carrying power. E. g. England produces cotton, woollen and iron goods: France, silks and wines: Russia, corn and other agricultural productions: Australia, sheep, gold, &c. How is the distribution of these several commodities over the world, and the payment for each of them brought about?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 80.

_____________________

From the MORAL SCIENCES TRIPOS.

THURSDAY, Nov. 28, 1872. 9 to 12 a.m.
POLITICAL ECONOMY.

  1. Investigate the principles that should regulate the price of a postage stamp (for internal circulation).
  2. How far is the price of a newspaper determined by the cost of its production? how far by supply and demand?
  3. “So far from the 6 per cent, rate (of discount) having caused any inconvenient pressure, it has hitherto totally failed in bringing back any of the redundant means held by the community, and which, such is the general prosperity, they prefer keeping in their desks to putting them to productive use through banking channels.”
    Point out the economical errors contained in this passage.
  4. A government taxes the manufacture of beer. People do not leave off drinking beer, the demand for it remains the same, and the manufacturers can raise the price to the full amount of the tax. The consumers save the extra price by economizing in use of provisions, but the demand for these does not fall off, as the government spends the tax in buying provisions.
    What will be the effect on prices? and what inference may be drawn as to general laws of rise and fall of price?
  5. Australia exports wool largely to England.
    Examine briefly the manner and extent in which the price of Australian wool in England would be affected by the following occurrences:

(1) Large consumption of Australian mutton in England.
(2) Cessation of the returning stream of enriched English emigrants, from Australia to England.
(3) Extensive gold-discoveries in Australia.

  1. What will be the effect, if any, on the rents of a country of either of the following occurrences?

(1) A large migration of the agricultural population to the manufacturing districts:
(2) The abolition of Protection.

  1. How soon after the first colonisation of a new and fertile country will any part of its land be rented? What will determine the amount of the highest rent paid, and how will this be affected by the progress of civilisation?
  2. Between two countries, chiefly agricultural, the exchange is at par: how will it be affected by the discovery in one of the two countries of large mines of coal and iron? Examine the reason and the limits of the effect produced.
  3. Mill says that a tax on the raw material of a manufacture “limits unnecessarily the industry of the country: a portion of the fund destined by its owners for production being diverted from its purpose.”
    In order to test the truth of this statement compare in detail the effects produced by taxing wool and cloth respectively, considering both the temporary effects produced at the time of imposition of such taxes and also their permanent effects.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 83.

_____________________

From the MORAL SCIENCES TRIPOS.

FRIDAY, Nov. 29, 1872. 1 to 4.
POLITICAL ECONOMY.

[Not more than four questions are to be attempted.]

  1. Give a history of the development of the Economic view of agricultural production from Quesnay to Ricardo. Examine especially Adam Smith’s view. Notice and explain the difference between his account of rent of land, and of mines. What does he mean by saying that “the most fertile mine determines the price;” and is there any sense in which the statement is defensible?
  2. Give briefly the different views that have been taken of the Foundation of Value. What is meant by the “amount of value” in the country? Is the phrase justifiable? Give Bastiat’s Theory of Value, examining

(1) How far it is possible to make it include all cases:
(2) How far it is useful in determining the precise value of anything.

How far is Bastiat’s criticism of Adam Smith for “attaching value to material things” well founded?

  1. Give a history of the changes which have taken place in the economic relation of the colonies to the mother-country, in so far as this is determined by law: and examine how far in any stage of a colony’s development Protection may be advantageous to (1) the mother-country, (2) the colony.
  2. Examine and compare the different theories upon which the Relief of the poor has been administered in England from the time of Elizabeth to the present. Upon what assumptions, psychological or sociological, does the mode of administration prevailing at present appear to proceed? and how far do these assumptions correspond to actual fact?
  3. Give the principal means by which the commercial system proposed to increase the quantity of gold and silver in any country. How far are any of these employed at present in European countries? How far are the grounds on which they are retained the same as those criticized by Adam Smith?
  4. State carefully how far you consider the method of Political Economy to be inductive, and how far deductive. Illustrate by considering the evidence on which Ricardo’s Theory of Rent is maintained: distinguishing between different propositions which may appear to be combined in the theory, either as it was stated by Ricardo, or as it has since been modified by others.
  5. Give an account of the restrictions upon Free-Trade in Money at present existing in England: examining how far they can be justified on the ground of

(1) Their real effects.
(2) Their supposed effects.

  1. Bastiat argues that in a state of society based on Free Contract, there is naturally a perfect harmony of economic interests among its members. Examine carefully how far this is true, independently of any monopolizing of the natural agents of production: and discuss the answers which Bastiat (and others) have made to the objections that may be drawn from the fact of such a monopoly.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 85.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
FRIDAY, Nov. 29, 1872. 9 to 12.

  1. Distinguish between Productive and Unproductive Labour, between Simple and Complex Co-operation, and between Fixed and Circulating Capital.
  2. Point out the fallacy of the argument in favour of extravagant expenditure grounded upon the supposition that it is good for trade.
  3. ‘As the population of the country increases, agricultural produce has a tendency to become more expensive.’
    Why? Shew the importance of the words printed in Italics.
  4. What is Communism? What were the distinguishing features of the scheme proposed by Fourier? Discuss its practicability.
  5. Analyse the ‘cost of labour.’
  6. Describe the systems of tenancy known as Metayer and Cottier.
  7. Determine the causes which regulate the prices of
    1. old china vases,
    2. potatoes in the London markets,
    3. cotton dresses.

Has gold a price? Has it value?

  1. A draper buys up all the manufactured silk of a pattern that happens to be fashionable in the hope that he will be able to dispose of his stock at the high price occasioned by this manoeuvre. Is this a safe investment of capital?
  2. Investigate the social and economic effects of ‘Out-door relief’.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 115.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
FRIDAY, Nov. 29, 1872. 1 to 4.

  1. What exactly is Credit?
    Compare the economic effects of the ‘credit’ which a tradesman gives to his unproductive customers, and that which he obtains from a banker.
  2. Criticize upon Adam Smith’s principles the propriety of the following taxes under our present circumstances:

(1) A fixed duty levied upon the farmer for every acre sown with wheat.
(2) A tax upon every article sold by auction, levied upon the seller.
(3) A tax upon maidservants.

  1. In what various ways has the scale of prices in different countries been affected by the operations of Governments upon money or the precious metals?
  2. Under what circumstances is international trade between any two countries profitable? Is it advantageous to the whole population of each country?
  3. State the principal provisions of the Bank Charter Act. Upon what grounds is it generally attacked?
  4. What exactly is meant by the Exchanges being unfavourable to a given country? Is such a state of things advantageous to any persons in that country?
  5. Under what circumstances does Adam Smith consider that protective import duties are advisable? Apply his arguments to the present trade of England.
  6. What has Adam Smith to say upon “the discouragement of agriculture in Ancient Europe”?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 115.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
SATURDAY, Nov. 30, 1872. 9 to 12.

  1. How do you define a tax? Are gas and water rates, and tolls on bridges, taxes?
  2. Give some account of the principal causes which make the Rate of Discount in any country fluctuate from year to year. Why do Consols fall at the mere anticipation of a war between two foreign countries?
  3. Describe some of the principal ways in which Governments have interfered with the natural price of food.
  4. Bastiat maintains that the ‘domain of what is gratuitous is continually enlarging’: explain this statement, and shew what use he makes of it.
  5. How does Bastiat define Value? According to his use of the word, would it be accurate to say that the value of meat has trebled during the last fifty years?
  6. In discussions upon Communism we frequently meet with the terms Natural and Artificial Organization of Society: what is the distinction between them?
  7. On what grounds is property in land singled out for special attack? How does Bastiat meet such attacks?
  8. Give some account of the functions of Banks in earlier times, and compare them with their present functions.
  9. What does Adam Smith understand by the Natural Progress of Opulence? How has it been interfered with?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 116.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
MONDAY, June 2, 1873. 9 to 12.

[Fawcett’s Manual of Political Economy]

  1. Distinguish between Wealth, Capital, and Money.
  2. Illustrate the two following statements:
    1. The labour of productive labourers is not unfrequently unproductive.
    2. Labour which is unproductive may yet be very useful.

How does Fawcett propose to extend Mill’s definition of Productive Labour?

  1. Investigate the advantages and disadvantages of farming on a large and small scale.
    How far would it be possible to secure the advantages of both large and small farming by the application of the joint-stock principle?
  2. “In the absence of agricultural improvements, more land is not brought into cultivation, unless the value of agricultural produce is increased.”
    Shew the connexion of this proposition with Ricardo’s theory of Rent, and examine any objections which have been brought against that theory.
  3. “The increase of national prosperity has as yet made but little impression upon the condition of the labouring classes.” Do you think that this statement is true? If you do, how do you account for the fact, and what remedies do you consider the most likely to be effectual? If you do not, state the reasons for your opinion.
  4. What are the principal causes of the different rates of wages in different employments, and in different localities either of the same or of different countries?
  5. What are the elements of which profits are composed? In what sense is it true that “the profits of different trades have a constant tendency to become equalized”?
  6. Give a short account of the tenure known as Métayer, pointing out under what conditions it is likely to work well.
  7. What are the principal points in which the laws regulating the price of iron ore, and those regulating the price of cotton fabrics, differ? How is the price of an ancient statue determined?
  8. Give some account of the laws which regulate the value of gold.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 355.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
MONDAY, June 2, 1873. 1 to 4.

(Half the total marks for this paper will be assigned to the Essay.)

  1. State as strongly as you can the arguments for and against the appropriation of landed property by the State.
  2. What is meant by the Solidarity of Society?
    Discuss the relation between the Solidarity of Society and the social effects of the principle of Competition.
  3. Compare the views of Smith and Bastiat upon the nature of Value.
  4. “Where Malthus saw Discordance, attention to this element enables us to discover Harmony.”
    What was the nature of this ‘Discordance’?
    How is Bastiat enabled ‘to discover Harmony’?
    Compare the views of other Economists.

*  *  *  *  *  *  *  *  *  *

Write an essay on one of the following subjects:—

(a) The Mercantile System.
(b) The Navigation Laws.
(c) The Poor-law Question.
(d) The Custom of Primogeniture.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 356.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
TUESDAY, June 3, 1873. 9 to 12.

  1. State and criticise Smith’s account of the elements that form the natural price of commodities.
  2. How does Smith divide land considered in its relation to rent? Is the division a sound one?
  3. Trace the effect of the progress of improvement upon the price of (a) silver, (b) cattle, (c) wool.
  4. Explain the nature of a promissory note, a bill of exchange, an exchequer bill.
    What circumstances make the rate of exchange unfavourable to a country?
  5. Examine Smith’s views with regard to the comparative benefit to society of the employment of capital in farming and in manufactures.
  6. Shew how credit facilitates production.
  7. Discuss the economic effects of bounties on production, and on exportation of corn.
  8. Give some account of the Methuen treaty; the motives which led to it; and its effects upon the trade of the countries concerned in it.
  9. Discuss the comparative advantages and disadvantages of direct and indirect taxation.
  10. Investigate the causes of the prosperity of new colonies.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 357.

Image Source: Mathematical Bridge at Queen’s College, Cambridge University (1865).

Categories
Exam Questions Harvard

Harvard. Exams for Elementary, Full, and Advanced Political Economy. 1880-81

 

This post reaches back to the early years of Harvard’s (then) department of political economy. A grand total of three courses were offered in 1880-81. The textbooks of choice were Mill’s Principles of Political Economy and Cairnes’ Leading Principles of Political Economy. Some links to the chapters/sections cited are included below.

1879-80 Harvard Exams in Political Economy

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Harvard College Courses
POLITICAL ECONOMY.

  1. The Elements of Political Economy.—Financial Legislation of the United States.—Lectures. Twice a week. Professor Dunbar and Dr. Laughlin.
    Course 1 is intended for students who desire to pursue the study for only one year.
  2. Mill’s Principles of Political Economy. —Financial Legislation of the United States. —Lectures. Three times a week. Professor Dunbar and Dr. Laughlin.
    Courses 1 and 2 cannot be taken together, nor can either be taken by any student who has taken the other.
  3. Cairnes’s Leading Principles of Political Economy. —McLeod’s Elements of Banking. —Bastiat’s Harmonies Economiques. —Lectures. Three times a week. Professor Dunbar.
    Students proposing to take course 3 must first consult the Instructor.

Source: The Harvard University Catalogue, 1880-81, pp. 82-83.

Harvard Graduate Department
POLITICAL ECONOMY.

  1. Public Finance. —Leroy-Beaulieu’s Science des Finances. Once a week. Professor Dunbar.

Source: The Harvard University Catalogue, 1880-81, pp. 192. [apparently not taught in 1880-81 according to the Annual Report of the President of Harvard College, 1880-81, p. 62.]

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Political Economy Course Enrollments
1880-1881

No. of Sec-tions Hours per week for stu-dents Hours per week for instruct-tors
Prof. Dunbar and Dr. Laughlin Political Econ. 1 Elementary Course.—Mill’s Principles of Political Economy.—Lectures 22 Total:
7 Seniors,
4 Juniors,
9 Sophomores,
2 Others.		 1 2 2
Prof. Dunbar and Dr. Laughlin Political Econ. 2 Full Course.—Mill’s Principles of Political Economy.—Lectures on Currency and the Financial Legislation of the United States 100 Total:
13 Seniors,
73 Juniors,
13 Sophomores,
1 Other.		 2 3 6
Prof. Dunbar Political Econ. 3 Advanced Course.—Cairnes’s Leading Principles of Political Economy.—Giffen’s Essays in Finance.—Lectures 12 Total:
1 Graduate,
8 Seniors,
2 Juniors,
1 Law.		 1 3 3

Source: Harvard University. Annual Report of the President of Harvard College, 1880-1881, p. 49.

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The John Stuart Mill’s Principles:
textbook of Harvard choice

Most likely edition of John Stuart Mill’s Principles of Political Economy used at Harvard was a New York reprint of the London 5th edition. It corresponds to the pages given for the mid-year exam in Political Economy 1 from 1879-80.

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Final Examinations
Mid-Year and End-Year, 1880-1881

POLITICAL ECONOMY 1.
[Mid-Year Examination, 1880-81 with references to J. S. Mill]

  1. Explain the following terms: Real Wages, Fixed Capital, Allowance System, Margin of Cultivation, Price, Demand, Medium of Exchange, Seignorage, Value of Money, and Bill of Exchange.
  2. In what way would a general demand for luxuries effect productive laborers, and the wealth of the community? ( I., ch. v, §5)
  3. State the laws which regulate the permanent and temporary values of agricultural products.
  4. How far does the law of Demand and Supply govern the value of money? ( III., ch. ii., §5.)
  5. Explain the following statement: “It is true, the absolute wages paid have no effect upon values; but neither has the absolute quantity of labor.” ( III., ch. iv., §3.)
  6. Show how Gresham’s Law is illustrated by the history of the currency in the United States between 1834-1873.
  7. What are the different forms assumed by credit? What are their relative effects on prices? ( III., chs. xi. and xii.)
  8. State the doctrine of Comparative Cost. What is the advantage of international trade to the production of a country?
  9. What determines the value of imported commodities?
  10. Describe the issue of assignats, and point out the mistakes committed.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 14-15.

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POLITICAL ECONOMY 1.
[Final, Year-End Examination, 1880-81, with references to J. S. Mill]

  1. Define Supply, Value of Money, Productive Consumption, Cost of Production, Cost of Labor, Exchange Value, Law of Production from Land, Rate of Profit, Capital, and Gresham’s Law.
  2. Explain fully whether you consider that United States bonds are capital or not. (Book I., ch. 4, §3.)
  3. (1) What is the lowest rate of profit which can permanently exist?
    (2) Why is this minimum variable? (Book II., ch. xv., §2.)
  4. (1) What connection exists between the Price of agricultural products and the amount of Rent paid?
    (2) Can rent affect the Price?
  5. Explain carefully the following:—
    “The average value of gold is made to conform to its natural value in the same manner as the values of other things are made to conform to their natural value.” (Book III., [ch. ix] §2.)
  6. State the conditions under which International Trade can permanently exist. (Book III., ch xvii.) What will be the ultimate effect of a large movement of foreign gold upon Prices, Imports, and Exports in the receiving country?
  7. How does the general rate of interest determine the selling price of stocks and land? (Book III., ch. xxiii., §5.)
  8. Point out carefully the connection of money wages with the productive power of the land cultivated by a community. (Book III., ch. xxvi. §1.)
  9. What is the general effect of the progress of society on the land-owner, the capitalist, and the laborer? (Book IV., chs. ii., iii., iv.)
  10. On whom does a tax of a fixed proportion of agricultural produce fall? (Book V., ch. iv., §3.)
  11. Describe the leading provisions of the national bank system, as they now exist, in regard to (1) the security for notes; (2) reserves; redemption of notes; (3) aggregate limit of circulation; (4) gold banks; (5) and state the important changes made since the passage of the original act. (6) Compare our system with that of the Bank of England.
  12. State the provisions of the Resumption Act, and the circumstances which made it easy to resume specie payment at the date fixed upon

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 10-11.

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POLITICAL ECONOMY 2.
[Mid-Year Examination, 1880-81, with references to J. S. Mill]

In answering the Questions, do not change their order.
In all cases give the reasons for your answer.

  1. Is an actor to be classed as a productive laborer? The inventor of a machine? A confectioner?
  2. If in a country like this a large amount of capital becomes fixed in the building of railroads, what effect will this change taken by itself have upon the laboring class, supposing the capital to be (1) domestic, or (2) borrowed wholly or in part from abroad?
  3. How do banks help forward the tendency of profits to equivalent rates in different employments?
  4. To what extent is it true that “wages (meaning money wages) vary with the price of food, rising when it rises, and falling when it falls.” [Book II., ch. xi. §2]
  5. What determines
    1. the general rate of wages in a country,
    2. the relative rates of wages in different employments?
  6. How is it shown that “rent does not really form any part of the expenses of production or of the advances of the capitalist?” [Book II., ch. xvi. §6]
  7. How are we to reconcile these two passages from Book III., ch. IV.:—
    1. “High general profits cannot any more than high general wages, be a cause of high values.” (§4.)
    2. “Every rise or fall of general profits will have an effect on values.” (§5.)
  8. What is the system upon which the small silver currency of the United States is coined and issued?
  9. What will be the effect if the circulating medium of a country is increased beyond its natural amount,
    1. when the medium is coin?
    2. when it is coin and convertible paper?
    3. when it is inconvertible paper?
  10. Why does the increase or diminution of the reserve of a bank affect its ability to lend?
  11. What is the plan of the National Banks of the United States and of the Bank of England respectively, as regards (1) the ultimate redemption, and (2) the convertibility, of their notes?
  12. Arrange the following resources and liabilities of the Bank of England in the proper form, separating the Issue and the Banking Departments:—
Notes Issued £41.5 Government Securities £14.2
Other Deposits 27.9 Reserve 9.4
Other Securities (Loans) 27.9 Public Deposits 5.6
Coin and Bullion 26.5 Rest 3.2
Government Debt, &c. 15.0 Seven-day Bills 0.3
Capital 14.5
  1. Having arranged the account, show what changes would be made in it, if the Bank increased its loans by 3 millions, and sold 1 million of government securities, and if depositors at the same time withdrew 2 millions to be sent abroad.

**If you have time, state any difficulty which you find in Ricardo’s doctrine of rent.**

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 15-16.

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POLITICAL ECONOMY 2.
[Final, Year-End Examination, 1880-81, with a link to J. S. Mill]

One question may be omitted from each of the four groups.

I.

  1. Show carefully the distinction between wages, cost of labor and cost of production.
  2. Why is it that a potential change of the supply of other commodities is enough to make their value conform to any change in their cost of production, but that in the case of gold and silver the change of supply must be actual?
  3. What is the error involved in the assumption frequently made by writers and public speakers, that the currency of a country ought to increase in like ratio with its wealth and population?
  4. What effect does the great durability of gold and silver have upon the value of money?

II.

  1. Explain the incidence of taxes laid on wages.
  2. Explain what effect, if any, will be produced on the price of corn by,
    1. a tax upon rent;
    2. a tithe;
    3. a tax of so much per acre, irrespective of value;
    4. a tax of so much per bushel.
  3. What is the meaning of the statement that “it is not a difference in the absolute cost of production, which determines the interchange [of commodities between countries], but a difference in the comparative cost.” [Book III., ch. xvii, §2.]
  4. Why does cost of production fail to determine the value of commodities brought from a foreign country? Does it also fail in the case of commodities brought from distant parts of the same country?

III.

  1. What effect is produced upon rents, profits and wages, respectively, in a country where population is stationary and capital advancing, like France?
  2. Explain the doctrine of the tendency of profits to a minimum, the cause of that tendency, and the circumstances which counteract it.

IV.

  1. Explain the changes in the amount of greenbacks outstanding, beginning at February, 1868.
  2. Describe the provisions of the national bank system, as they now exist, and compare them with those of the Bank of England, in regard to (1) the security of notes; (2) reserves; (3) redemption of notes; (4) aggregate limit of circulation; (5) gold banks.
  3. State the provisions of the Resumption Act, and the circumstances which made it easy to resume specie payment at the date fixed upon.
  4. What was the difference between the five-twenty bonds and the six per cents. of 1881 (Act of July, 1861)? Why was it good policy for the government to issue such a large proportion of the former?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 11-12.

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POLITICAL ECONOMY 3.
[Mid-Year Examination, 1880-81, with references to Cairnes, et al.]

Do not change the order of the questions.

  1. “No article is dearer than another simply in virtue of the skill bestowed upon it.” What then is the relation of skill to value? [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 76]
  2. What is the argument for the proposition that the price of corn, in the progress of society, reaches a maximum, beyond which it cannot advance?
  3. When a depreciation of currency is in progress, what will be the difference in the effect on the prices of manufactured goods, vegetable products, and animal products respectively?
  4. What is meant by saying that a nation is interested, not in having its prices high or low, but in having its gold cheap?
  5. Explain the statement that “the high scale of industrial remuneration in America, instead of being evidence of a high cost of production in that country, is distinctly evidence of a low cost of production.” [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 385]
  6. This being shown, “how is the fact to be explained, that the people of the United States are unable to compete in neutral markets in the sale of certain imported wares, with England and other European countries?” [J. E. Cairnes.Some Leading Principles of Political Economy Newly Expounded (1874), p. 386]
  7. “The laws of political economy express tendencies.” Examine this statement, and show the meaning of the word “law” as used in economic discussion.
  8. Examine the following statement of the doctrine of rent and of the deductions therefrom:—
    “Ricardo taught that cultivation begins, when land is first open to occupation and population is scarce, with the richest soils, and thence of necessity proceeds, with the growth of numbers, steadily to poorer and still poorer, until at last all proportion must cease, and famine and death relieve the overburdened earth; the end being only postponed, as assassination is said to temper despotism, by a graduated massacre, in the forms of war, pestilence and famine, which anticipate by performing the catastrophe in detail; that is, if people did not die prematurely in series adjusted to the overruling law they would have to perish at last in the lump.—Elder’s Memoir of Carey, p. 14.
  9. Examine the position taken in the following extract from an argument in disproof of the Malthusian Theory:—
    “The question of fact into which this issue resolves itself is not in what stage of population is most subsistence produced? But in what stage of population is there exhibited the greatest power of producing wealth? For the power of producing wealth in any form is the power of producing subsistence—and the consumption of wealth in any form, or of wealth producing power, is equivalent to the consumption of subsistence….Thus the power of any population to produce the necessaries of life is not to be measured by the necessaries of life actually produced, but by the expenditure of power in all modes.
    “There is no necessity for abstract reasoning. The question is one of simple fact. Does the relative power of producing wealth increase with the increase of population?”— Henry George’s Progress and Poverty, pp. 126-7.
  10. Also the following:—
    “Agricultural profits cannot fall unless recourse is had to poorer land, but such land will never be cultivated, since capitalists can never be willing to submit to a fall of profit: and the very meaning of the expression that some land is not worth cultivating, is, that it will not yield the ordinary profit to the farmer who should attempt to reclaim it. It appears then, that the rate of profit is stationary in agriculture, and, consequently, in all other trades; and that whatever rate be established in an early stage of society, it must remain the same throughout its subsequent development.”— Shadwell’s System of Political Economy, p. 165.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 16-17.

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POLITICAL ECONOMY 3.
[Final, Year-End Examination, 1880-81, with references to Cairnes and Giffen]

  1. What effect has the existence of “non-competing groups” on the exchange of commodities, each of which is the product of several classes of labor, as g. the exchange of a steam engine for cotton cloth?
  2. How far are prices determined by Reciprocal International Demand, Reciprocal Domestic Demand, and cost of Production respectively? Is any change to be made in Cairnes’s statement that “an alteration in the reciprocal demand of two trading nations will act upon the price, not of any commodity in particular, but of every commodity which enters into the trade?” [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 93]
  3. What inferences are to be drawn from a regularly recurring excess of exports? In what respect is it to be viewed with satisfaction, or the reverse?
  4. The destruction of our carrying trade is spoken of as causing us a serious economic loss. What is the nature of the loss?
  5. A public officer in a recent interview set forth that,—
    “The sorghum, tea and silk industries will before many years save the United States importations amounting to about two hundred million dollars;” and that, inter alia, “we can raise on American soil a tea that will compete successfully in the market of the world and that will save us an annual tribute to foreigners of twenty-two millions.”
    What effect, if any, would this be likely to have on the competition of foreign manufactures with our own?
  6. How was the payment of the French indemnity effected with so little immediate disturbance of the money market, and what connection had the payment with the financial crisis of 1873?
  7. Although “war, it is understood, makes money dear,” still Mr. Giffen (writing in 1872) says that “we are entitled to say that money has been cheap in Europe, notwithstanding the war.” Why did the war not produce the usual effect? [Robert Giffen. Essays in Finance (3rd 1882), p. 55.]
  8. What grounds are there for believing that, at the lowest point of the recent commercial depression, England, instead of “living on her capital,” as some maintained, was still accumulating?
  9. “If we observe that the commencement of the great crisis in the commerce and trade of the world coincides precisely with the demonetization of silver in North America and Germany, we shall easily perceive the connection of causes between that fact and these phenomena, and see that the mischievous results of the demonetization of silver must, from year to year, become more apparent.”
  10. What are Mr. Giffen’s views as to the possibility of an early reduction of the English national debt? What is the nature and advantage of the operation in terminable annuities sometimes undertaken for this purpose?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 12-13.

Image Source: Harvard Square in 1882 from the Brookline Photograph Collection, Public Library of Brookline.

Categories
Exam Questions Harvard

Harvard. General Exams in Microeconomic and Macroeconomic Theory. Spring, 1992

 

The following general examinations for microeconomic and macroeconomic theory (Spring 1992) have been transcribed from a collection of general exams at Harvard from the 1990s provided to Economics in the Rear-view Mirror by Abigail Waggoner Wozniak (Harvard economics Ph.D., 2005). Abigail Wozniak was an associate professor of economics at Notre Dame before being appointed a senior research economist and the first director of the Federal Reserve Bank of Minneapolis’ Opportunity & Inclusive Growth Institute. Economics in the Rear-view Mirror is most grateful for her generosity in sharing this valuable material.

The “Wozniak collection” is over 90 pages long, so it will take some time for all the exams to get transcribed.

Transcriptions are also available for: 

Spring 1991. General Examinations in Microeconomic Theory and Macroeconomic Theory.

Fall 1992. Microeconomic Theory and Macroeconomic Theory.

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HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics 2010b: FINAL EXAMINATION and
GENERAL EXAMINATION IN MICROECONOMIC THEORY

Spring Term 1992

For those taking the GENERAL EXAM in microeconomic theory:

  1. You have FOUR
  2. Answer a total of FIVE questions subject to the following constraints:
    *at least ONE from part I;
    *at least TWO from Part II;
    *EXACTLY ONE from Part III.

For those taking the FINAL EXAMINATION in Economics 2010b (not the General Examination):

  1. You have THREE HOURS
  2. Answer a total of four questions subject to the following constraint:
    *DO NOT ANSWER ANY questions from Part I;
    *at least TWO from Part II;
    *at least ONE from Part III.

 

PLEASE USE A SEPARATE BLUE BOOK FOR EACH QUESTION

PLEASE PUT YOUR NAME (OR EXAM NUMBER) ON EACH BOOK

 

PART I (Questions 1 and 2)

QUESTION 1

A consumer in a three good economy (goods denoted x1, x2 and x3; prices by p1, p2, p3) with wealth level w>0 has demand functions for commodities 1 and 2 given by:

\begin{array}{l}{{x}_{1}}=100-5\,\,\frac{{{p}_{1}}}{{{p}_{3}}}+\beta \,\,\frac{{{p}_{2}}}{{{p}_{3}}}+\delta \,\,\frac{w}{{{p}_{3}}}\\{{x}_{2}}=\alpha -\beta \,\,\frac{{{p}_{1}}}{{{p}_{3}}}+\gamma \,\,\frac{{{p}_{2}}}{{{p}_{3}}}+\delta \,\,\frac{w}{{{p}_{3}}}\end{array}

Where Greek letters are non-zero constants.

i) Indicate (but don’t actually do it!) how to calculate the demand for the third good, good 3.

ii) Are the demand functions for x1 and x2 appropriately homogeneous?

iii) Calculate the numerical values of \alpha ,  \beta , \gamma . (Hint: what are the various restrictions on the consumer’s demand function and on the relationships between various demand functions? Have you made use yet of all of them?)

iv) Given your results above, draw for a fixed level of x3, the consumer’s indifference curve in the x, y plane.

v) What does your answer to (iv) imply about the form of the consumer’s utility function u(x1, x2, x3)?

 

QUESTION 2

Consider a Cournot duopoly. The inverse demand function is

p=100 – (q1 +q2)

where qi, i= 1,2, is the production of firm i (Note: if q1+q2 ≥100 then the price is zero). Marginal cost for the two firms is constant and equal to zero.

  1. Show that given the production qi≤100 of firm i the optimal reaction of firm j (j \ne i) is qj = ½ (100-qi). Use this to compute the Cournot-Nash equilibrium. Draw also the reaction function.
  2. Argue that it can never be a best response for any firm to supply more than x1=50. Argue then that if no firm will ever supply more than 50 then no firm will ever supply less than x2=25.
  3. Continue the above recursion and determine the limit of xt. Interpret in terms of the concept of rationalizability (define terms).

 

PART II (Questions 3, 4 and 5)

QUESTIONS 3

Consider the following 2 person, 2 commodity general equilibrium model. Individual 1 is risk neutral and has a utility function

u1(x,q) = x + y

Individual 2 is risk averse and has von Neumann-Morgenstern utility function

u2(x,y) = x½ + y.

Individual 1’s endowment of good y is {\bar{Y}}, he has no x. There are three states of nature and the endowment of individual 2 depends on the state. The levels of endowment of x are x1, x2 and x3. He has no y.

  1. Suppose the subjective beliefs are that each state is equally likely. Find a complete-market Arrow-Debreu equilibrium.
  2. Suppose there is a market for the delivery of x and y only uncontingently. Find the equilibrium. Is it efficient?
  3. Suppose that before any trade takes place, all individuals will be told whether or not state 1 will arise. They are not able to distinguish between states 2 and 3 at this stage. Find the equilibrium as it depends on the information disseminated.
  4. Calculate the expected utility attained in the equilibrium of part c), ex ante (i.e. before any announcement is known), using the fact that the probability that the individuals will be told that the state is 1 is 1/3, and that it is not 1 is 2/3. Under what conditions (on x1, x2 and x3) is the information socially valuable. Comment.

 

QUESTION 4

[This problem concerns a firm which is not explicitly optimizing anything. We just want to study the stability of its profitability and debt-equity structure.]

At each instant of time, the firm employs only a single factor, capital, in an amount K. Gross profits are f(K), concave and increasing in K. It has a certain level of borrowing B on which it owes rB in interest costs; r is fixed. Net profits therefore are

\pi = f(K) – rB

Some of the profit is distributed in the form of dividends, D. The rest of it is held as retained earnings R. Suppose the firm follows the “dividend policy”

\begin{array}{l}R=\alpha \pi \,\,\,\,\,\,\,\,\,\,\,\,\,\,0\le \alpha \le 1\\D=\left( 1-\alpha  \right)\pi \end{array}

The change in firm’s stock capital is equal to the sum of its level of retained earnings R and new borrowing B minus depreciation \delta K (\delta > 0)

\dot{K}=R+\dot{B}-\delta K

Its level of new borrowing responds positively to the excess of current net profits above a target level \pi *, according to

\dot{B}=\beta \left( \pi -\pi * \right)

\beta \ge 0.

In an equilibrium, K, B, \pi , R and D are all constant.

1) Assume we have an equilibrium for fixed parameters \alpha and \beta . For what values is it locally stable?

2) Equity in the firm is, by definition, K – B. Find the steady-state debt-equity ratio, in terms of the parameters and the production function.

Assuming that the equilibrium is stable,

3) What is the effect of a small increase in \pi * on the equilibrium debt-equity ratio?

 

QUESTION 5

There are n men and n women. Each man has an ordering over the set of women, and each woman has an ordering over the set of men. (indifference is not allowed)

  1. Show that in any Pareto optimal system of pairing men and (i.e. a pairing that cannot be dominated by another system), someone must get his/her first choice.
  2. Consider the following system: Each man proposes to the woman whom he most prefers. Women receiving more than one proposal accept the one they like the best. (Women receiving exactly one proposal accept it.)
    Next, all men whose proposals were rejected, propose to the woman they most prefer from among those who have not yet accepted proposals. The rules for acceptance are as above. This continues until all pairings have been completed.
    Is the result a Pareto optimum?
    Is it in the core of this game, suitably defined? (supply your own definition here).
  3. Show by example how the system could be manipulated by a man who knew the preferences of all other men and who could profess false preferences.

 

PART III (ANSWER EXACTLY 1 QUESTION) (Questions 6 and 7)

QUESTION 6

What does “competition” mean in the context of neoclassical theory? To what extent are neo-Marxian and neo-Keynesian theories compatible with the neoclassical idea of competitive markets? What alternatives to neoclassical adjustment processes characterize Marxian and Keynesian theories?

 

QUESTION 7

Paul Samuelson once urged us “(r)emember that in a perfectly competitive market it really doesn’t matter who hires whom; so have labor hire ‘capital’”. (“Wages and Interest: a Modern Dissection of Marxian Economic Models.” American Economic Review, 1957) Does it really not matter who hires whom in neoclassical theory? Is the same true in a Marxian framework? A Keynesian framework?

 

Source: Department of Economics, Harvard University. Past General Exams Spring 1991-Spring 1999, pp. 60-66. Copy provided to Economics in the Rear-view Mirror by Abigail Wozniak.

___________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics 2010d: FINAL EXAMINATION
and
GENERAL EXAMINATION IN MACRO ECONOMIC THEORY

Spring Term 1992

FINAL EXAMINATION

Instructions for all Economics Department graduate students:

The examination will last four hours.

Answer all three parts of the examination (Parts I, II and III). Within each part, be sure to answer two questions (so that, in all, you will answer six questions).

Use a separate bluebook for each question. Clearly indicate the question number and your identification number on the front of each bluebook.

Do not indicate your name on any bluebook you submit.

Instructions for all other students:

The examination will last three hours.

Answer Parts II and III only. Within each part, be sure to answer two questions (so that, in all, you will answer four questions).

Use a separate bluebook for each question. Clearly indicate the question number and your name on the front of each bluebook.

 

PART I:

  1.  Consider the following q-theory of investment:

(1) I=I\left( q \right)\,\,\,\,\,\,I\acute{\ }>0

(2) \dot{K}=I-\delta K

(3) r={\left( \dot{q}+\pi  \right)}/{q}\;

(4) \pi =\pi \left( K \right)\,\,\,\,\,\,\,\,\,\pi \acute{\ }

Where I is investment, q is Tobin’s q, K is the capital stock, \delta is the depreciation rate, r is the required rate of return, and \pi is the profit from owning one unit of capital.

  1. What is Tobin’s q?
  2. Interpret each equation.
  3. Write the model in terms of two variables and two laws of motion.
  4. What is the state (non-jumping) variable, and what is the costate (jumping) variable?
  5. Draw the phase diagram for this model, including arrows showing the dynamics, the steady state, and the stable path.
  6. Because of an increase in acid rain, the depreciation of capital (\delta ) suddenly increases. Assume the change is permanent. Compare the old and new steady states.
  7. Describe the transition between the old and the new steady states.
  8. Suppose now that (because of strong environmental policies) the increase in \delta is only temporary. Describe the effects.

 

Question 2 (Answer both Parts)

  1. (20 minutes)
    The Solow model assumes a constant gross saving rate, whereas the neoclassical growth model determines the saving rate through household optimization.

    1. Explain the forces in the neoclassical growth model that make the saving rate rise or fall as an economy develops.
    2. How does this behavior of the saving rate influence the convergence rate—that is, the per capita growth rate of a poor country relative to a rich country? (Assume here that all countries are closed and have the same underlying parameters of technology and preferences.)
  2. (20 minutes)
    “The imperfection of private credit markets implies that a cut in lump-sum taxes, financed by a budget deficit, affects the economy. In particular, in a full-employment setting,

    1. a larger deficit crowds out private investment, and
    2. a budget deficit is a “bad idea.”
      Discuss and comment.

 

PART II

Answer any two of the following three questions. Be sure to use a separate bluebook for each answer.

  1. A familiar suggestion to central banks is to conduct monetary policy by “targeting” nominal income. Distinguish (a) the argument for targeting nominal income on the ground that this is the measure of economic activity the central bank should ultimately care about affecting, from (b) the argument for targeting nominal income on the ground that doing so will best enable the central bank to affect some other aspect(s) of economic activity in an optimal way. In your analysis of argument (a), be specific about the preference that this notion of nominal income targeting implies with respect to real income and prices separately, and say whether you think these preferences are sensible (and why). In your analysis of (b), this way would lead to a better outcome than focusing monetary policy directly on those aspects of economic activity that the central bank ultimately seeks to affect.
  2. “When money, interest-bearing government debt and productive capital are imperfect substitutes in investors’ portfolios, the economy can achieve a stable growth equilibrium only if the part of the government’s primary deficit (that is, its deficit exclusive of interest payments) that it finances by issuing new debt is equal to some particular value in relation to the economy’s size, where the deficit/income ratio is uniquely determined by specific parameters describing economic behavior. If the government attempts to run a larger debt-financed primary deficit, its growing debt will crowd out private capital, which in turn will raise the real interest rate, which will cause the government’s interest payments to rise, which will make its outstanding debt grow even faster—all in an explosive way—and vice versa if the deficit/income ratio is too small.” Do you agree or disagree with this statement? Why? Be specific about the assumptions underlying your answer.
  3. Under what conditions would the government’s choice among alternative forms of interest-bearing debt, to finance a given non-monetized deficit, affect (a) the aggregate level of real economic activity, and/or (b) the composition of real economic activity, and/or (c) the price level? Why? Under what conditions would this choice affect none of (a), (b) or (c)? Be explicit about the assumptions you make in describing both sets of conditions.

 

PART III

QUESTION 6

Consider an economy with overlapping generations of identical two-period lived consumers who work in the first period of their life and consume in the second period. The utility function of a consumer representative of the generation born at time t is

{{U}_{t}}={{c}_{t+1}}-\frac{1}{2}a_{t}^{2},

Where ct+1 denotes the consumption taking place at t +1, of a consumer born at t and a her labor supply at time t. Output is produced with labor using a linear production function: one unit of labor yields one unit of output. Output is non-storable. Population is constant.

  1. Show that the competitive equilibrium of this economy is Pareto sub-optimal. Explain why.
  2. Propose two schemes to eliminate this inefficiency. Show precisely how to implement them and compare the resulting welfare levels to the welfare level achieved by the economy described in the previous question. [Restrict yourself, for simplicity, to schemes yielding constant consumption and employment over time.]
  3. What is the channel through which your two proposed schemes affect employment? How does this channel compare with the transmission mechanism of i) real business cycle models, and ii) Keynesian models?

QUESTION 7

You are asked to testify in the Senate about the advisability of phasing out the current U.S. social security scheme. Sketch the argument that you would make in favor of or against this phasing out, knowing that the Senators whom you are addressing have no tolerance for mathematics.

QUESTION 8

In a large open economy, what is the equilibrium effect on national saving and investment of a shift in desired domestic saving (originating, say, from a change in how patient domestic consumers are) or in desired domestic investment (coming, for instance, from a permanent productivity shock)? Does your answer shed any light on the debate about how well international capital markets operate?

 

Source: Department of Economics, Harvard University. Past General Exams Spring 1991-Spring 1999, pp. 67-71. Copy provided to Economics in the Rear-view Mirror by Abigail Wozniak.