Category: Exam Questions

The archival collection of examinations in economics at Johns Hopkins University is extensive, if not complete. This post provides transcriptions for all the available copies of undergraduate examinations (along with course descriptions and staffing information) for the 1922-23 academic year. The Elements of Economics course was taught in three sections, the first of which (a) was designated as “academic” and the second (b?) was designated as “engineering”. It is not clear what the third section was except that it was taught by the lowest on the totem pole, the graduate student Robert C. Gillies, for whom a memorial from his Princeton Class of 1918 has been inserted into this post.

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From the Princeton Alumni Weekly

ROBERT CARYLE GILLIES ‘18

In 1917, Bob Gillies left Princeton for war service. He rose to the rank of captain and served overseas with the 8th F.A. in WW I. Returning to the U.S. and Princeton, he graduated in 1920 and later earned a Ph.D. at Johns Hopkins. Bob became a research man in economics. He worked for the Assoc. of Railroad Executives and the Bell System.

About his subsequent life, during which we seldom saw or heard from him, we quote from a recent letter from his son Robert Gillies ’48:

“I am writing to tell you that my father died in West Berlin, Germany, on April 8. He was 86 years old. He moved to Washington in 1932 and worked for the government. In 1946 he went to Austria and Germany as an economist for the office of U.S. Military Government. He married while in Salzburg and had a daughter in 1950. His wife died in 1968. Shortly after this he retired and lived in West Berlin until his death.

“He returned to this country only once—when my wife and I were married in the University Chapel in 1947. However, his letters frequently referred to Princeton and his 1918 classmates.”

Source: Princeton Alumni Weekly, Volume 78 (September 26, 1977, p. 20).

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Faculty and assistants providing undergraduate economics instruction in 1922-23

George Ernest Barnett, Ph.D., Professor of Statistics.
A. B., Randolph Macon College, 1891; Fellow, Johns Hopkins University, 1899-1900, and Ph.D., 1901.

William Oswald Weyforth, Ph.D., Associate Professor in Political Economy.
A.B., Johns Hopkins University, 1912, and Ph.D., 1915; Instructor, Western Reserve University, 1915-17.

Broadus Mitchell, Ph.D., Associate in Political Economy.
A.B., University of South Carolina, 1913; Fellow, Johns Hopkins University, 1916-17, and Ph.D., 1918.

Miss Theo Jacobs, Associate in Social Economics
A.B., Goucher College, 1901; Federated Charities of Baltimore (District Assistant, 1905-07, District Secretary, 1907-10, Assistant General Secretary, 1910-17, Acting General Secretary, 1917-1919.

Robert Carlyle Gillies, Graduate Student in Economics
A. B., Princeton University, 1920.

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UNDERGRADUATE COURSES ANNOUNCED FOR 1922-23
(ex ante)

1. Elements of Economics. Particular attention is given to the theory of distribution and its application to leading economic problems.
   Three hours weekly through the year. Associate Professor Weyforth and Dr. Mitchell.
2. (a) Statistical Methods. After a preliminary study of the value and place of statistics as an instrument of investigation, attention is directed to the chief methods used in statistical inquiry.
   Three hours weekly, first half-year. Professor Barnett.
   (b) Money and Banking. The principles of monetary science are taught with reference to practical conditions in modern systems of currency, banking, and credit.
   Three hours weekly, second half-year. Associate Professor Weyforth.
3. (a) Labor Legislation. The theory and practice of labor legislation are studied, with attention given to legal, economic and social considerations.Three hours weekly, first half-year. Dr. Mitchell.(b) Investments.Includes historical and analytical description of the more important forms of investments and theories of valuation and amortization.
   Three hours weekly, second half-year. Professor Barnett.
4. (a) Labor Problems. The problems growing out of modern industrial employment will be studied. Three hours weekly, first half-year. Dr. Mitchell. (b) Corporation Finance. The theory and practice of corporation finance are considered, with particular reference to the problems presented in the United States.
   Three hours weekly, second half-year. Professor Barnett.[Course 4 will not be given in 1922-23.]
5. (a) Foreign Trade and Exchange. The economic principles of international commerce, the methods of conducting foreign trade, and the theory and practice of foreign exchange will be studied.
   Three hours weekly, first half-year. Associate Professor Weyforth.
   (b) Economic History of the United States. This course deals with the economic development of the country and with the way in which the economic motive has influenced our history.Three hours weekly, second half-year. Dr. Mitchell.
6. (a) Applied Statistics. The applications of statistics to business and economic problems, such as price levels, cost of living, wage adjustments, business cycles, and business forecasting, are considered.
   Three hours weekly, first half-year. Associate Professor Weyforth.
   (b) Public Finance. The theory and practice of finance are considered, with particular reference to the problems of taxation presented in the experience of the United States.
   Three hours weekly, second half-year. Dr. Mitchell.[Course 6 will not be given in 1922-23.]
   Note—Course 2 is open only to such students as have completed or are pursuing Course 1; Courses 3, 4, 5 and 6 only to students who have completed 1 and 2.

Source: The Johns Hopkins University Circular 1922 (Volume XLI, Whole Nos. 335-341), pp. 344-345.

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UNDERGRADUATE COURSES REPORTED FOR 1922-23
IN ANNUAL JHU PRESIDENT’S REPORT
(ex post)

Professor Barnett, Associate Professor Weyforth, Miss Jacobs, Dr. Mitchell, and Mr. Gillies conducted the following undergraduate courses:

Political Economy I. Three hours weekly, through the year. Particular attention was given to the theory of distribution and its application to leading economic problems. (Associate Professor Weyforth, Dr. Mitchell, Mr. Gillies.)

Political Economy II. Three hours weekly, through the year. In the first half-year a preliminary study of the value and place of statistics as an instrument of investigation was made; attention was directed to the chief methods used in statistical inquiry. In the second half-year the principles of monetary science were taught with reference .to ·practical conditions in modern systems of currency, banking and credit. (Mr. Gillies and Associate Professor Weyforth.)

Political Economy III. Three hours weekly, through the year. In the first half-year, the theory and practice of labor legislation were studied. In the second half-year, attention was given to the theory of investments. (Professor Barnett.)

Political Economy V. Three hours, weekly, through the year. In the first half-year, the economic principles of international commerce, the methods of conducting foreign trade, and the theory and practice of foreign exchange were studied. In the second half-year, the course was designed not only to show the structure of typical business entities, but their methods of formation and expansion. Common forms of securities were examined. Operation and administration of business units were studied in detail. (Associate Professor Weyforth and Mr. Gillies.)

Political Economy VII. Two hours weekly, through the year. The history and development of charitable and social agencies were traced. Causes and treatment of cases of dependency and delinquency were discussed. (Miss Jacobs.)

Political Economy VIII. Three hours weekly, through the year. The course was designed to furnish a background for the study of economic principles and special phases of economic activity. The particular purpose of the course was to show the relationship between economic fact and economic and political theory and practice. (Dr. Mitchell.)

Source: Johns Hopkins University. Annual Report of the President, 1922-1923. In The Johns Hopkins University Circular, New Series, 1923, No. 7 (November 1923), pp. 57-58.

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY I A
Friday, Feb. 2, 1923 – 2-4 p.m.

1. Describe the main features of the manorial system and the guild system in England.
2. Explain the following terms: goods, face goods, economic goods, capital utility, diminishing utility, marginal utility, value, price, supply, demand, elasticity of demand.
3. What is meant by the division of labor? Explain its advantages. What is the roundabout or capitalistic method of production? What are the requirements for the formation of capital?
4. What are the more important types of business organization? Explain their respective advantages and disadvantages.
5. What is meant by the gold standard? By the bimetallic standard? What factors led to the demand for the bimetallic standard in the United States between 1875 and 1896?
6. Explain how changes in the quantity of money and in bank deposits may cause changes in the general level of prices.
7. Explain the principal functions and the importance of commercial banks in our economic system.
8. Outline the organization of the Federal Reserve System. How does it remedy some of the principal defects of the old national banking system.

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY I A (ACADEMIC)
May 28, 2-4 p.m.

1. (a) What are the outstanding defects of the competitive system?
   (b) What did Marx say would result from competition?
2. (a) What are the varieties of Socialism?
   (b) What is the difference between State Socialism and Guild Socialism?
3. (a) Give reasons for the advance of labor unionism.
   (b) Why are unions justifiable?
   (c) Distinguish between craft and industrial unions, and comment upon the advantages of each.
4. Should railroads in the Unites States be publicly owned? Give full reasons for your answer.
5. What are the cardinal principles of taxation as stated by Adam Smith?
6. What is the justification for the progressive income tax?

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY I B
Friday, Feb. 2, 1923 – 2-5 p.m.

1. If you chose to pursue graduate work in political economy as a major subject, and were asked why you did not select history, political science, or psychology instead, what reasons would you give?
2. What are the large divisions of the subject of political economy? Under which of the heads does the theory of rent fall?
3. What is meant by the division of labor, when did it become a characteristic feature of our economic life, and what have been its chief consequences to workers? In what ways does the division of labor increase product?
4. What do you think of the statement: “Value depends upon utility”? Explain fully.
5. Arthur Young found the farmers in a part of England following inefficient methods of cultivation, and advised that the best remedy lay in a raising of the rents by landlords. hat do you think of his plan?
6. What is the argument for the Single Tax?
7. Were the Southern slaves capital?
8. Name some items which are wealth in the individual sense but not in the social sense.
9. Name some respects in which our present economic system is not competitive.
10. Construct supply and demand schedules so as to show how a market price is determined.

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY I (Engineering)
May 28, 1923.

1. What is credit? Explain its importance in business operations. Distinguish between commercial and investment credit. Define and illustrate a promissory note and a bill of exchange.
2. Explain the theory that each factor in production tends to receive a share of the product corresponding to its marginal productivity.
3. What is the principle that determines what goods a country imports and what goods it exports? Why is a high tariff in the United States detrimental to the exporting interest in this country?
4. What is capital? How does it come into existence? What principles determine the return received by it?
5. What are some of the outstanding economic characteristics of railroad transportation? Explain their bearing upon the following: (a) practice of charging what the traffic will bear; (b) large variations in net earnings with small variations in traffic; (c) cut-throat nature of the competition that has at times developed.
6. Explain the theory of rent.
7. Describe the various types of labor organizations. What are the arguments for and against the boycott, and the closed shop?
8. What is socialism, anarchism, syndicalism? Give briefly the arguments for and against socialism.

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY I C
Friday, Feb. 2, 1923 – 2 p.m.

1. (a) Which do you consider most important in the study of economic science: credit toward a college degree; training for business; culture; or preparation for citizenship? Just how do you think your study will contribute toward that end?
   (b) Discuss the proposition: Good ethics, good art, or good politics on the part of the masses is well nigh impossible without sound economics.
2. Robinson Crusoe on his island was able to work out an efficient personal economy because he knew what he needed most and what to do next. Are the American people at a disadvantage in this respect? Are strikes and depressions partly a manifestation of that disadvantage? If so, how would you as a practical economist seek to remedy this situation? Defend your remedy.
3. A small savage tribe gradually develops into a great nation. What would be the accompanying evolution in economic practice?
4. Discuss the following statement: “In 1770 Arthur Young reckoned the income of England to be £120,000,000; in 1901 the income may be roughly set down at £1,600,000,000. Making correct allowances for population and for prices, this growth of income would signify a large increase of commodities per head; but would it tell us that we are working and living better than our ancestors?”
5. It is said that the spender is a greater asset to economic society than the saver, because he puts his money back into circulation. Discuss.
6. (a) A new labor-saving device is put into operation, throwing a large class of skilled workmen out of employment. To what extent is this a hardship to labor, a benefit, or both? Explain.
   (b) Criticize the cost of production theory of value.
7. Name a large industry in which there holds a condition of increasing expenses. How does introduction at successive intervals of labor-saving machinery and more scientific technique affect this condition? Draw what you consider a unit expense curve for this industry over several such intervals. Are monopolies likely to occur in a field of increasing expenses? Would the ratio of fixed to total expenses of the typical business unit be high or low in such a field?
8. What is the fallacy of bi-metallism? Of fiat money? Connect the value of an elastic currency (from the standpoint of the nation’s business) with the quantity theory of money.
   

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EXAMINATION IN POLITICAL ECONOMY I C. MR. GILLIES
May 28, 1923

1. (a) A small increase in the supply of a certain article results in a heavy decrease in price. Does this signify an elastic or an inelastic demand?
   (b) A reduction in price of an article from 12¢ to 10¢ results in increased sales of 10 per cent. What is the numerical measure of the elasticity of demand?
   (c) What is the difference in the usual methods of weighting commodity price index numbers and cost of living index numbers?
2. Define (a) bill of exchange (b) long bill (c) purchasing power parity (d) doctrine of comparative costs.
   How are exchange rates kept approximately normal?
   Draw up a “balance sheet” for a year’s transactions between the United States and Europe, including the principal invisible exchanges.
3. What is your view point concerning protection? Support and defend your position.
4. How is the apportionment of the total product among the various factors of production determined?
5. Why do we distinguish between the “intensive” and the “extensive” margins? To which factors of production do they apply? Are they usually found in conjunction? Give reasons.
   What are some of the conditions affecting the supply of labor? How is it affected by legislation enacted already? What is the philosophy of workmen’s compensation laws?
6. What determines the rate of interest? What is meant by a “free production good”? Is the accumulation of capital a help or a menace to labor? Are waste, loss, destruction of property by fire, etc., a benefit to labor in the long run? In the short run? Explain.
7. Why do we call the railway industry one of increasing returns? Of joint costs? Is the proportion of fixed capital high or low? What have these facts to do with rates?
   Roughly, how are railway revenues divided up among the four factors of production? Do you think physical valuation should determine railway profits? If so, would you take original cost or present value? Why?
8. What has been the tendency of public expenditures in the last century as to (a) purposes (b) proportion of national income absorbed? Does an increase in this proportion indicate inefficiency or extravagance? Are there any dangers in such an increase? Explain.
   What policy do you favor for the disposal of our remaining public land?
   If a tax policy were founded upon the more nearly equal distribution of wealth, would it meet with your approval? Why? What forms of taxes do you think would be emphasized under this policy? Why?CAUTION. This examination will be used Friday, June 1, 1923 also. Do not, therefore, discuss or divulge its contents in any way.

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THE JOHNS HOPKINS UNIVERSITY
EXAMINATION IN STATISTICS (POL. ECON. II)
Feb. 1, 1923, 9 a.m. – 12 m.

1. (a) Under what circumstances is it best for the statistician to carry out his own primary investigations? Are there any disadvantages in this method?
   (b) You have an appropriation of $100,000 with which to investigate the degree of education attained by adults in a community. You decide to employ enumerators. Salaries and expenses of enumerators is estimated at $40,000 and printing the report of your inquiry will cost $10,000. Each question asked by the enumerators will cost $10,000 to tabulate. Draft a form for them to use, with such questions as you think suitable.

20 minutes

ARRAY OF LEAF-LENGTHS
(in millimetres)

a = 23.5

2. The above is a tabular representation of an array of leaf lengths. Work up this information as a frequency table, both simple and cumulative, in seven classes.
   a. Cross check the given table and find if the value of a shown is correct. (This work may be done on the question paper, which should then be submitted at close of examination. Or, describe what you did on answer paper).
   b. The items in the given table are correct to the nearest millimeter. How many decimals would be justified as accurate in a? (Probable error equals possible error divided by the square root of n).
   30 minutes
3. Plot the data in your frequency table as a histogram. Smooth and estimate the mode. How would you convert your data to plot as a percentage histogram? Plot as an ogive and smooth. Locate the median and quartiles.
   20 minutes
4. What method would you use to locate the model class when poorly defined? What is the easiest way to locate the mode within a given class? Give formula.
   Find the coefficient of dispersion, using the average deviation from the mode. How would you modify procedure if using the median or the arithmetic average? Calculate the quartile coefficient of dispersion.
   20 minutes
5. Compute the standard coefficient of dispersion. Give formula for the coefficient of skewness based upon this coefficient. Calculate the coefficient of skewness based upon the average deviation from the mode, also that based upon the quartiles.
   30 minutes
6. Draw a grid to scale for a logarithmic historigram. How do you plot points for this historigram? Find the weighted index number of prices for the following group of commodities, using 1913 as a base:

COMMODITY PRICES

Note: Production used is that for year 1919 (approximate) and is in tens of millions.
Plot the weighted index and apply Marshall’s method comparing the proportional rates of increase from 1913 to 1915 and from 1916 to 1920.

30 minutes

7. Compute Karl Pearson’s coefficient of short time correlation between supply and price in following table:

INDICES OF SUPPLY AND PRICE

Probable error = ?

Indicate your procedure in case concurrent deviations are used. Formula?
Show how you would find the ratio of variation for long time changes in this data by the Galton graph. Does the Galton graph apply wholly to historical variables ? Why is it necessary for this graph that both variables be reduced to index numbers?

30 minutes

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JOHNS HOPKINS UNIVERSITY
[POLITICAL ECONOMY 2B]
MONEY AND BANKING
TUESDAY, MAY 29, 1923, 9-12 AM.

1. What is standard money? State the requisites of:
   (a) A gold standard
   (b) A bimetallic standard
   (c) A paper standard.
   State the advantages and disadvantages of each.
2. Outline the principal legislation in the monetary history of the United States.
3. Explain the importance of credit in our present economic system. How does a bank judge of the credit standing of a borrower?
4. Classify and describe the different kinds of loans made by commercial banks. What is the general type of loan that is most suitable for a commercial bank?
5. Describe the operations of a commercial paper house. Explain the advantages and disadvantages of this method of financing.
6. Explain the need for elasticity in currency and elasticity in credit. How did the Federal Reserve System remedy the defects of the old National Banking System in these respects?
7. Describe the organization of the Federal Reserve System.
8. What is the need for control of bank credit. How may this control be effected under the Federal Reserve System?

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY 3 [A. Labor Legislation]
Thursday – February 1, 1923

1. What provisions in the Federal Constitution are important with respect to labor legislation, state and national?
2. On what grounds were the two Federal child labor laws declared unconstitutional?
3. How far may the states go in regulating hours of labor? Trace the constitutional history of such legislation.
4. Discuss the economic arguments for and against immigration.
5. When is a strike illegal?
6. Distinguish the trade union “minimum” wage and the legal “minimum” wage.
7. Discuss the economic considerations relating to a reduction of hours of adult laborers from nine to eight in a particular trade.
8. Describe the Liverpool Dock Scheme. What economic result is effected? How fare is the scheme applicable to other industries?

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THE JOHNS HOPKINS UNIVERSITY
POLITICAL ECONOMY 3 [B. Investments]
May 29th, 1923. 9—12 A.M.

1. Distinguish capital, capital stock and capitalization.
2. How much (roughly) is $1000 in 1930 worth now? How much is $1000 in 1940 worth now? Explain.
3. Under what circumstances is a city justified in incurring a debt? Is the City of Baltimore justified in borrowing money to pay for school houses?
4. Distinguish speculation from investment.
5. What are the elements in an investment which the purchaser buys? Why are there no “absolutely” good investments?
6. Appraise a savings bank deposit as an investment by breaking it up into its elements. A bond of the State of Maryland.
7. To what extent are the obligations of the State of Maryland enforceable?
8. Discuss the tests of “ability to pay” applicable respectively to states and private corporations.

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Dr. Weyforth.
POLITICAL ECONOMY V
FOREIGN TRADE AND EXCHANGE
Monday – January 29, 1923 – 9 a.m.

1. How do you account for England’s unfavorable balance of trade prior to the war and the favorable balance of the United States? What is likely to be the future of the balance of trade of the United States?
2. What selling policies are open to a manufacturer contemplating foreign business? Explain their respective advantages and disadvantages.
3. In quoting terms of sale the seller may require any of the following: (a) advance payment by importer; (b) payment by importer upon delivery of goods; (c) deferred payment by importer. What methods of international payment can be used for carrying out these various terms?
4. Describe the operation of an import credit on New York from the beginning to the end of the transaction.
5. What are the factors determining the actual rates of exchange between a gold standard country and a paper standard country?
6. Explain the operations involved in drawing a sterling draft on South America.
7. What factors contributed to the preeminence of sterling exchange as an international medium of exchange?
8. What is the importance of a wide discount market in maintaining and extending the use of dollar exchange?

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POLITICAL ECONOMY 5.
Business Organization
June 1, 1923

1. Have you completed the assigned reading including the supplementary forms in Stockder? If not, indicate the extent of completion.
2. Define (a) business establishment, (b) entrepreneur, (c) circulating capital, (d) securitization, (e) common law, (f) treasury stock, (g) municipal corporation, (h) voting trust, (i) court of equity, (j) underwriter, (k) scientific management.
3. Compare the individual proprietorship, the partnership, the joint stock company and the corporation as to
   (a) place in the development of the capital concept;
   (b) extent of present day use;
   (c) suitability for various types of business;
   (d) legal status and requirements;
   (e) control, and liability of the component members.
4. (a) What is the participation association and how did it originate?
   (b) What types of partners may bind the firm? Which types have limited liability?
   (c) and (d) Describe the operating structure of the corporation.
5. (a) Describe the characteristics of the business trust that distinguish it from the forms of business organization already mentioned.
   (b) Distinguish associations from federations and illustrate by examples.
6. (a) How do control companies control their subsidiaries? Does this form of business organization lend itself more readily to vertical or to horizontal combination? What purposes do finance and assumption companies serve?
   (b) Name some abuses of “big business” and show how the law has attempted to curb them.
7.  -8. You are the organizer, and, later, the general administrator of a large manufacturing plant, employment both men and women. (a) Whom would you bring in to assist the promotion? (b) How would you determine the location of your plant? (c) How would you lay it out? (d) How would your buildings be designed? What type of construction would you use, and how would you give your contracts for them? (e) How would you organize the shop forces? (f) What plans of wage payments would you use in the various departments? (g) What welfare work would you institute? (h) How would you organize your selling department? (i) What accounting systems would you use?

Re-examination in Business Organization
A. L. Tuvin

1. Discuss the joint stock company. Point out the similarities between it and the partnership; and also between it and the corporation.
2. Discuss the conditions which are conducive to successful combination.
3. What is meant by fair competition? Give an illustration of unfair competition.
4. Describe the agencies in the U. S. which are designed to secure fair competition.
5. What is a holding Company? Give its advantages and disadvantages. Discuss briefly the various forms.

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THE JOHNS HOPKINS UNIVERSITY
January 29, 1923, 9 A.M.—12 M.
[POLITICAL ECONOMY (12?)]
Economic History

1. What is the importance of economic history, and why do we place more emphasis upon English than upon American economic history?
2. What was the significance of Doomsday Book? What were the differences that distinguished the problems of the Norman kings from those of the Saxon kings?
3. How did serfdom originate and how did it disappear in England? Give a full answer.
4. How did the economic practices of the gilds differ from those of industry nowadays? Distinguish briefly between the domestic system, the factor system, and the factory system.
5. What were the results of inflation following the Black Death?
6. What is the fallacy of mercantilism? What economic writer gave chief opposition to the mercantilist philosophy?
7.  Name as many books as you can, that you have read, which, although not in the field of economic history proper, yet contain information of interest to the student of this subject? The books may concern either English or American conditions.

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives, Eisenhower Library. Department of Political Economy, Series 5/6. Box: 6/1. Folder: Department of Political Economy, Exams, 1907-1924.

Image Source: Webpage “Gilman Hall circa 1920” in the Hopkins Perspective, 1876-Today collection.