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Chicago. Money and Banking. Economics 330 Exam. Autumn 1932

Here we have the exam questions and Milton Friedman’s choices together with his notes for one of the answers to Lloyd Mints’ graduate course (first in a sequence of the two quarter courses.) on Money and Banking in 1932.

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[Univ. of Chicago]

[Milton Friedman (MF signature)]

 

ECONOMICS 330
Autumn, 1932

Write on any four questions.

  1. [✓] “The banks could either keep the demand for real capital within the limits set by the supply of savings or keep the price level steady; but they cannot perform both functions at once.” (Hayek) Discuss this statement critically.
  2. “Only the purely static quantity theory needs no index number, for its comparisons assume relative prices to be unchanged inter se. The objections to Professor Fisher’s Equation of Exchange arise mainly from the faults of the price index implied in it.” (Hawtrey) Explain and evaluate this statement.
  3. [✓] The criticism is sometimes made of the quantity theory that it assumes other things to be equal, whereas in fact they are not. Discuss this criticism. What “other things” are referred to?
  4. Discuss the relation between the k of Keynes’ earlier equation and the velocity of circulation.
    b. Discuss the statement that changes in the velocity of circulation of goods cannot bring about changes in the price level because of the fact that they necessarily bring about compensating changes in the velocity of circulation of money.
  5. [✓] According to Keynes’ analysis what would it be necessary to do in order to eliminate the business cycle? State and support your opinion of Keynes’ conclusion.

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[Milton Friedman’s right margin notes for Question 4:]

n=pk
p=\frac{n}{k}
\frac{n}{k}=\frac{MV}{T}\text{ (MF then cancels }n\text{ with }M\text{)}
\frac{1}{k}=\frac{V}{T}
k=\frac{T}{V}=\frac{1}{V}

Source: Hoover Institution Archives, Milton Friedman Papers, Box 115, Folder  13 (Biographical. Class exams, ca 1932-38).

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Cf. Keynes: Tract on Monetary Reform (1923), p. 76-77

“We can measure this definite amount of purchasing power in terms of a unit made up of a collection of specified quantities of their standard articles of consumption or other objects of expenditure….Let us call such a unit a ‘consumption unit’ and assume that the public require to hold an amount of money having a purchasing power over k consumption units. Let there be n currency notes or other forms of cash in circulation with the public, and let p be the prices of each consumption unit (i.e., p is the index number of the cost of living), then it follows from the above that n = pk. This is the famous Quantity Theory of Money.”

 

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Courses Exam Questions Harvard Research Tip

Harvard. Course. Money, Banking, Commercial Crises, Williams and Gilbert 1937-38

 

The Harvard course, Economics 41 “Money, Banking, and Commercial Crises,” was a full-year course that James Tobin took as an undergraduate in 1937-38. Professor John H. Williams lectured during the first term and the vast bulk of lectures for the second term were held by Dr. Richard Vincent Gilbert (A.B., Harvard, 1923; Ph.D., Harvard, 1930. Dissertation: The theory of international payments). Associate Professor Seymour Harris does not appear anywhere in Tobin’s notes, so we can presume for now that Harris was substituted for by Williams and Gilbert and that the official enrollment report (see below) was the victim of a copy-paste error.

It appears from Tobin’s notes that Gilbert had been the section leader during the first term and was succeeded in the second term by the economics graduate student Kenyon Edward Poole (A.B., Harvard, 1929; A.M., Fletcher School of Law and Diplomacy 1934) whose doctoral dissertation “German recovery policies, 1932-1937” was accepted in 1938., A.B., Harvard 1929. Tobin wrote in a marginal note to his own student notes (dated 1992) that the section that met February 16, 1938 “was Gilbert’s last section.” Thus presumably, the earlier sections must have been Gilbert’s doing.

Course enrollment, 1937-38
Course readings, first term
January Reading Period list
Mid-year examination
Course readings, second term
May Reading Period list
Final exam
Research tip

___________________________ 

Official Course Announcement
for Economics 41, 1937-38

For Undergraduates and Graduates.

Economics 41 (formerly 3). Money, Banking, and Commercial Crises
Mon., Wed., and (at the pleasure of the instructor) Fri., at 2. Professor Williams and Associate Professor Harris.

 

Source: Official Register of Harvard University, Vol. XXXIV, No. 44. Announcement of the Courses of Instruction offered by the Faculty of Arts and Sciences during 1937-38. Second edition. October 1, 1937.

Copy in Harvard University Archives. HUC 8500.16. Box 5 “Courses of Instruction”, Folder “1937-38”, p. 149.

 

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Enrollment in Economics 41,
1937-38 by class

[Economics] 41.        (formerly 3). Professor Williams and Associate Professor Harris.—Money, Banking, and Commercial Crises.

Registered total: 205, of which 3 Graduates, 49 Seniors, 121 Juniors, 30 Sophomores, 2 “Candidates for the Bachelor’s Degree out-of-course”.

 

Source: Report of the President of Harvard College and reports of departments for 1937-38, p. 85.

 

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Economics 41, 1937-38:
First Term Reading List

Economics 41
Readings: First Term [Handwritten note: “Excluding Reading Period”]

  1. The nature and function of banking
    Dunbar: Theory and History of Banking, Chs. 1,2,3,4. [pp. 1-60]
    White, Money and Banking, Ch. 16 [pp. 349-372]
  2. Creation of Deposits
    Phillips, Bank Credit, Ch. 3. [pp. 32-77]
    Currie, Supply and Control of Money, Chs. 5-7. [pp. pp. 46-83]
  3. Note Issue
    Dunbar, Ch. 5. [pp. 50-81]
    Currie, Ch. 10 [pp. 110-115]
  4. Commercial Loan Theory
    Robertson, Money, Ch. 5 [pp. 92-117|; Currie, Ch. 4. [pp. 34-46]
  5. U.S. Banking history
    White, Chs. 18-23 [pp. 387-529]
  6. The Federal Reserve System
    Dunbar, Ch. 6 [pp. 81-110]
    Burgess, Federal Reserve Banks and the Money Market [pp. 1-327],
    entire Federal Reserve Bulletin, July 1935, Supply and Use of Member Bank Reserve Funds. [pp. 419-428]
    Currie, Chs. 8,9. [pp. 83-110]
    Hardy, Credit Policies of the Federal Reserve System, Chs. 3-11. [pp. 34-243]
  7. Recent Banking Changes
    White, Chs. 29, 30. [pp. 670-738]
  8. Foreign Banking Systems
    Dunbar, Chs. 8-10 [pp. 139-235]

Source: Harvard University Archives. HUC 8522.2.1. Box 10, Folder “Syllabi, course outlines and reading lists in Economics, 1937-1938”.

 

Note: The page numbers were added to the 1937-38 readings in pencil for many items. In 1938-39, the identical titles plus pages were given for the same list of readings. The same information was copied by James Tobin into his course notes for 1937-38 (apparently correcting the page numbers listed for White under VII. to 679-738.)

 

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Economics 41, 1937-38:
Reading Period, January 1938

 

Economics 41: Read one of the following:

Hardy, Federal Reserve Policy.
Hawtrey, Art of Central Banking, pp. 116-303.
Keynes, Treatise on Money, Vol. II, Book VII.

 

Note: The Midyear Reading Period list for January 1938 was not found in the Course material folder archives, however for January 1936 and January 1939 the same three books were listed which we can presume constituted the choice of readings for January 1938. From Tobin’s notes for the course, he apparently chose the Hawtrey book.

 

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1937-38
HARVARD UNIVERSITY

ECONOMICS 41
MONEY AND BANKING
Mid-year Examination 1938.

Answer questions 1, 2 and three others.

  1. (One hour.) Supply and Use of Member Bank Reserve Funds.

(in millions of dollars.)

From
Dec. 1923 to July 1924

From
July 1924 to July 1925
Bills discounted

-430

+224
Bills bought

-332

+184
U.S. government securities

+389

-194
Other Reserve Bank credit

+9

+4
Monetary gold stock

+267

-144
Treasury and national bank currency

+9

-28
Money in circulation

-288

+36
Treasury cash and deposits with Federal Reserve banks

+18

-43
Non-member bank deposits

+9

-8
Other Federal Reserve accounts

-20

+7
Member bank reserve balances

+193

+54
    1. What is the meaning of each of the above items?
    2. Account for the changes in member bank reserve balances (or in bills discounted) in the two periods.
    3. What conclusions do you draw regarding the nature and instruments of Federal Reserve policy?
  1. Outline:
    1. Keynes’ views on the effectiveness of central banking control in England and the United States.
      (or)
    2. Hawtrey’s treatment of the development of central banking in England.
  2. “From the first, the banking system in this country has given expression to the American ideal of individuality and freedom.” Discuss
  3. Discuss the conflicting views of the role of banks in the creation of credit.
  4. Do banks create capital?
  5. Discuss the nature, purpose and wisdom of the provisions of the Federal Reserve Act concerning the issue of notes by the Federal Reserve banks.
  6. Discuss the merits of requiring the holding of reserves equal to a fixed percentage of deposits in the case of (a) central banks and (b) other banks.
  7. Discuss the relative effectiveness of open market operations and the rediscount rate as central bank instruments of control.
  8. What should be the central bank’s attitude towards the stock market?

Source: Harvard University Archives. Mid-year examinations, 1852-1943 (HUC 7000.55). Box 13: Mid-year Examinations, 1938. Papers printed for Mid-year Examinations [in] History, History of Religions,…,Economics,…,Military Science, Naval Science, January-February, 1938.

 

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Economics 41, 1937-38:
Second Term Reading List

[The following list of readings has been put together from Tobin’s class and reading notes for the course.]

Arthur D. Gayer—Monetary Policy and Economic Stabilization: A Study of the Gold Standard. 1935.
Fisher. Purchasing Power of Money, pp. 1-74 and 149-181.
Hawtrey. Currency and Credit, new ed. Chs 3-4.
Keynes. Treatise. Vol I, chs. 4,5,6 (Section 1), 7.
Hawtrey. Trade Depression and the Way Out
Foster and Catchings. Profits, Part 5
Haberler. Prosperity and Depression. Review of Theories.
Optional Keynes, ch 14 and ch on theory of inex numbers.
Taussig: International Trade: ch. 21. Adjustment on inconvertible paper.

 

Source: Yale University Library. Manuscripts Collections. James Tobin Papers. Group No. 1746, Box No. 6. Notes for Economics 41, 1937-38.

 

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Economics 41, 1937-38:
Reading Period, May 1938

Economics 41: Read one of the following:

  1. Royal Institute of International Affairs, The Future of Monetary Policy.
  2. International Chamber of Commerce, International Economic Reconstruction. Either Volume I or Volume II.
  3. Robbins, The Great Depression.
  4. Ohlin, Course and Phases of the World Depression, (League of Nations Study)
  5. Hansen, Economic Stabilization in an Unbalanced World.

 

Note: Tobin presumably chose this last item by Hansen since it is the last set of reading notes he included for the course.

Source: Harvard University Archives. HUC 8522.2.1. Box 10, Folder “Syllabi, course outlines and reading lists in Economics, 1937-1938”.

 

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Economics 41, 1937-38:
Final Exam, June 1938

1937-38
HARVARD UNIVERSITY

ECONOMICS 41

  1. Discuss either (a) or (b).
    1. “Freedom of the exchange rates insulates the national economy against cyclical disturbances or monetary instability of foreign origin.”
    2. “A country which becomes a member of an international currency system, such as the gold standard provides, surrenders a part of its freedom of action, and assumes, along with the right to such benefits as it affords, certain very stern responsibilities.”
  2. Answer either (a) or (b).
    1. “Before 1914, changes in the value of gold were largely governed by the accident of gold discoveries or inventions bearing on methods of gold production.” Does the evidence support this view?
    2. Outline and criticize Fisher’s analysis of the factors determining the value of money.
  3. Discuss either (a) or (b).
    1. The underconsumption theories of the business cycle
    2. The investment theories of the business cycle.
  4. “One’s evaluation of a policy of flexible public works as an agency of economic stabilization depends upon the theory one holds of the fundamental nature of the business cycle.” Do you favor a policy of flexible public works? If so, on what grounds? If not, why not?
  5. Answer one of the following questions.
    1. Robbins’ views on the causes of the great depression.
    2. The Royal Institute of International Affairs’ analysis of the powers and limitations of the monetary authority.
    3. Hansen’s analysis of the breakdown of the international system in 1930-35.
    4. Gregory’s views on the major influences antagonistic to currency stabilization.
    5. Ohlin’s analysis of the causes of the great depression.
    6. Write a review of the book you read during the reading period.

Final. 1938.

 

Source: Yale University Library. Manuscripts Collections. James Tobin Papers. Group No. 1746, Box No. 6. Notes for Economics 41, 1937-38.

 

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Research Tip:

While at the Harvard Archives I came across Suggested Topics for Theses in Economics 41, 1938-39, HUC 8938.121.2. In it are listed 137 topics, each topic having between one to more than a dozen suggested references, running to 31 pages that includes twelve additional thesis subjects. The entire list of suggested topics with suggested references has been transcribed and posted!

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Image: My photo taken of a box of James Tobin’s notes as a student at Harvard. Not only are they bound, they have been cleanly copied in pen and are legible at the 99.9% confidence level.

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Courses Exam Questions Harvard Syllabus

Harvard Economics. Course. Graduate Theory. Schumpeter. Spring 1935

The second semester of Economics 11 for the academic year 1934-35  was taught by Joseph Schumpeter after Frank W. Taussig taught the first semester.

Wolfgang Stolper’s notes for the course (Box 19, Notebook “Taussig Ec 11 Theory. 1934-35”) taken during the Spring Semester 1935 follow the printed reading lists given below that are undated in the folder marked “Ec11 Fall 1935” in Schumpeter’s papers.

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Economics 11

The following is a brief outline of what will be covered in the first four to six weeks of the second semester.

I. Welfare and the National Dividend. Approximately two weeks. The discussion will turn around the following chapters from “The Economics of Welfare” by A.C. Pigou (3rd or 4th edition): Part I, Chapters 1,2,3,5,6,7,8; Part IV, Chapter 2; and Part II, Chapters 1,2,3,4,11. In the second edition the corresponding chapters from Part I are 1-7 inclusive and from Part II, 1,2,3,4,10. Chap. 10 Part II is completely revised in the third edition (where it appears as Chap. 11, Part II) and should if possible be read in the third. The material from Part II leads to the second main topic, namely,

II. The Laws of Cost and Returns. Probably three or four weeks. It is proposed to deal fully with the so-called “cost controversy”, a series of more or less closely connected articles which appeared in the Economic Journal from 1922 to 1932. The following is a list of the articles in the order of their appearance. Students will not be held responsible for those included in brackets, some of which are connected only remotely with the main controversy. 1) “On Empty Economic Boxes”, J. H. Clapham, Sept. 1922; “Empty Economic Boxes: a Reply”, A.C. Pigou, Dec. 1922; “Those Empty Boxes”, D. H. Robertson, March, 1924; “The Laws of Returns under Competitive Conditions”, P. Sraffa, Dec. 1926; [“The Laws of Diminishing and Increasing Costs”, A.C. Pigou, June 1927]; [“An Analysis of Supply”, A. C. Pigou; June 1928]; “Varying Costs and Marginal Net Products”, G. F. Shove, June 1928; [“The Instability of Capitalism”, J.A. Schumpeter, Sept. 1928;] [“The Representative Firm”, L.C. Robbins, Sept. 1928]; “Increasing Returns and Economic Progress”, A.A. Young, Dec. 1928; “Increasing Returns and the Representative Firm: a Symposium”, D.H. Robertson, G.F. Shove, and P. Sraffa, March 1930. The following two articles by R.F. Harrod are in effect a continuation of the “cost controversy”, but they will be considered later in connection with the discussion of imperfect competition: “Notes on Supply”, June 1930; and “The Law of Decreasing Cost”, Dec. 1931.

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[There is a gap in reading lists between the laws of costs and production above and the discussion of imperfect competition and monopolistic competition below. The following three topics and readings are taken from the second term of the academic year 1935-36. According to Stolper’s notes (both from class and his reading notes), the topics and material were at least touched upon in the second term of the academic year 1934-35. Cf. the final exam questions below.]

 

  1. Marginal Productivity and the Theory of Wages
    1. Marshall, Bk. VI, especially Ch. I.
    2. Hicks, J. R., “The Theory of Wages”, Chs. I and VI.
    3. ——-, Marginal Productivity and the Principle of Variation,” Economica, Feb., 1932.
    4. Schultz, Henry and Hicks, J. R., “Marginal Productivity and the Lausanne School: A Reply” and “A Rejoinder”, Economica, Aug., 1932.
    5. Clark, J. B., “The Distribution of Wealth”, Ch. VIII.
    6. Robertson, D. H., “Wage Grumbles” in the volume of essays entitled Economic Fragments.
  2. Elasticity of Substitution
    1. Hicks, Ch. VI (Cf. above).
      (mathematical treatment in Appendix for those who prefer)
    2. Machlup, Fritz, “The Common Sense of the Elasticity of Substitution”, Review of Economic Studies, June, 1935.
    3. Also notes and articles on substitution in Review of Economic Studies, Vol. I, nos. 1 and 2, though not required reading, may be consulted.
  3. Opportunity Costs.
    1. Green, D.I., “Pain Cost and Opportunity Cost”, Quarterly Journal of Economics, 1894.
    2. Davenport, H.J. , “Economics of Enterprise”, Ch. VI.
    3. Knight, F.H., “A Suggestion for Simplifying the Statement of the General Theory of Price”, Journal of Political Economy, 1928.

Source: Harvard University Archives, HUC (FP) – 4.62. Joseph Schumpeter Lecture Notes, Box 9, Folder “Ec11 1935-36”.

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Economics 11

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

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

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

I. The Technique and the Background.Pigou, Part II, Ch. XIV.
Robinson, Chs. 1, 2.
Chamberlin, Chs. 1, 2.		 V. Monopolistic CompetitionChamberlin, Chs. 4, 5, 6, 7.
Robinson, Ch. 7. Q.J.E., Nov. ‘34
Shove, E.J., March ’33.
Harrod, Q.J.E., May ’34.
II. Simple Monopoly.Pigou, Part II, Ch. XVI.
Robinson, Chs. 3, 4, 5.		 VI. Discrimination.Pigou, Chs. XVII, XVIII (Part II).
Robinson, Chs. 15, 16.
III. Duopoly and OligopolyPigou, Part II, Ch. XV.
Chamberlin, Ch. 3.		 VII. Imperfect Competition and the Theory of Distribution.Chamberlin, in March ’34 A.E.R. Supplement.
IV. Bilateral Monopoly.(To be discussed in class)  

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1934-35
Harvard University
ECONOMICS 11

Two questions may be omitted. Arrange your answers in the order of the questions.

  1. State the principle of Pigou’s method of measuring the National Dividend, and explain the relation of variations in the National Dividend, as thus measured, to “Welfare.”
  2. “What the production of any commodity costs to society or any individual, is the satisfaction which could have been derived from producing something else with the same means of production.” What do you think of this proposition?
  3. Explain briefly what is meant by
    (a) Elasticity of demand,
    (b) Elasticity of substitution,
    (c) Marginal revenue,
    (d) Bilateral monopoly,
    (e) Perfect competition.
  4. State the three theorems, which together constitute the “theory of marginal productivity” and show what, if anything, corresponds to each of them in the case of imperfect competition.
  5. “Monopolistic competition implies oligopoly and could not exist without it.” Do you agree?
  6. Define discrimination, and formulate the condition which must be fulfilled in order to maximize the discriminating monopolists profit. Do you think that the monopolists output will be greater or less than it would be without discrimination?

Final. 1935.

No. 55

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Source: Harvard University Archives. HUC (FP)–4.62. Joseph Schumpeter Lecture Notes, Box 6. Folder “Ec 11, Fall 1935”.

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Courses Exam Questions Harvard Syllabus

Harvard Economics. Course. Graduate Economic Theory. Taussig. 1934-5

Frank W. Taussig’s last time teaching the graduate theory course, Economics 11, was  in the Fall Semester of 1934. Joseph Schumpeter took over the second half of the course for the Spring Semester of 1935. In Schumpeter’s papers are 3 pages of Taussig’s handwritten notes and carbon copies of reading lists. Note: the folder where the material is found is labelled “Ec 11 Fall 1935” but material from 1934-35 is in it as well.

 

ECONOMICS 11, FALL SEMESTER 1934

_________________

[handwritten notes by F. W. Taussig, cf. initials in letter June 9, 1914 to Hunnewell in Lowell Papers, Box 14 Folder 403]

Economics 11 — 1934-35

Topics taken up by F.W.T. [Taussig], in order

  1. Ricardo, Mill—Theory of Value + Distribution
  2. “Labor Theory” as modified by non-competing Groups + Social Stratification
  3. Temporary Equil of S. + D.—inflow of goods to market from an existing stock
  4. Equil. of S. + D. for longer period.
    a) Marshall 2nd period—inflow from existing plant
    b)      “           3rd period—inflow from changing plant
  5. External + Internal Economies—M’s [Marshall’s] 4th period
  6. Quasi-Rent
    Agricultural + Urban Rent
  7. Profits
  8. Clark—B.B. [Böhm-Bawerk]
  9. Consumer’s Surplus.

Topics not taken up

Theory of Monopoly Price
Austrian Theory of Value

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[handwritten notes by F. W. Taussig]

(1

Ec 11 — ‘34-35

I

Ricardo, chs I Value (omitting the discussion of Adam Smith)

“    II Rent,   III Rent of Mines
“    IV
“    V Wages
“    VI Profits

Mill, Bk III chs I, III[,] IV

(Value, omitting ch II, which was considered later in connection with Marshall)

Mill   Bk II, ch. XVI ; Bk I, ch. XII (Rent)

“      Bk II, ch XI ; XIII, §§3-4 Wages
“      Bk II, ch XV ;   Profits
“      Bk IV, chs IV[,] V, VI ; Profits to a minimum

_________________

[handwritten notes by F. W. Taussig]

(2

Reading List—Econ 11 — 1934-35

Non-competing Groups + Labor Theory of Value

Cairnes[,] Leading Principles.  P+I, ch. III

Mill[,] Bk II, ch XIV (Differences of wages), cf. Adam Smith, Bk I, ch. X

Taussig, Principles, ch 47, 48

Marshall, Book VI chs IV, V;  Book IV, ch 6

Cf. Marshall second edition,  Bk VI, ch I, §3 (p. 557-558)

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[handwritten addition] 3)

[Typed table of readings that is nearly identical to Wolfgang Stolper’s hand-written reading list in his course notes from the Fall Semester 1934. Cf. Duke University, Rubenstein Rare Book & Manuscript Library. Wolfgang F. Stolper Papers, Box 19, Notebook: Taussig Ec 11 Theory, 1934-35]

Economics 11
1934-35

Demand,
Market
Value		 Mill, Book III, chs. 1, 2.
Marshall, Book III, ch. 3; Book V, chs. 1, 2.
Taussig, Quarterly Journal of Economics, May 1921
Normal
Value		 Mill, Book III, chs. 3, 4.
Marshall, Book V, chs. 3, 4, 5.
Viner, Zeitschrift f. Nationaloekonomie, Sept. 1931, vol. I
Taussig, Quarterly Journal of Economics, February 1919.
Marshall, Appendix H
Quasi
Rent		 Marshall, Book V, ch. 8; Book V, ch. 9.
Fetter, Quarterly Journal of Economics, May 1901 (vol. 15).
Increasing
Returns		 Marshall, Book V, ch. 12; Book IV, ch. 9, §7; ch. 10, 13.
Agricultural
Rent,
Urban Rent		 Marshall, Book IV, chs. 2, 3; Book V, ch. 10, (omit §§4, 5); Book VI, ch. 9; Book V, ch. 11.
Ely, Outlines, 5th ed., ch. 22.
Profits Mill, Book II, ch. 15.
Marshall, Book IV, chs. 12, 13; Book VI, chs. 7, 8.
Knight, “Risk, Uncertainty and Profits”, chs. 9, 10.
Ely, Outlines, ch. 24.L.
Robbins, The Representative Firm, Economic Journal (1928)
[handwritten addition] Marshall Bk V, ch. 10 §2 (settlers in a new country); Bk VI, ch V, §7 (rare natural abilities)
[handwritten addition] Schumpeter—Theory of Ec. Development ch. IV

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[Typed carbon list]

[handwritten addition] 4)

Economics 11
1934-35
Reading

I

Böhm-Bawerk, Positive Theory of Capital

Book II, chs. 1, 2, 4, 6
Book V, chs. 1, 2, 3, 4, 5
Book VI, chs. 1 (pp. 285-286), 2, 4, 5, 6
Book VII, chs. 1, 2, 5

II

Clark, Distribution of Wealth

chs. 6, 7, 8, 9, 20
chs. 11, 12, 13, 21

Marshall, Book IV, ch. 7 (“The Growth of Wealth”—Capital, Saving etc); Book VI, chs. 1, 2

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[Final Exam Economics 11, Fall Semester 1934]

1934-35
HARVARD UNIVERSITY
ECONOMICS 11

One question may be omitted. Arrange your answers in the order of the questions.

  1. “Suppose that society is divided into a number of horizontal grades, each of which is recruited from the children of its own members; and each of which has its own standard of comfort, and increases in numbers rapidly when the earnings to be got in it rise above, and shrinks rapidly when they fall below that standard. Suppose, then, that parents can bring up their children to any trade in their own grade, but cannot easily raise them above it and will not consent to sink them below it….”

Suppose also that there is free competition as regards the earnings of capital.

On these suppositions what would be the relation between

(a) the values of commodities and their “real cost”
(b) the values of commodities and their money costs;
(c) the values of commodities and their supply prices?

  1. “Internal economies of large-scale production are primarily a long-run phenomenon, dependent upon appropriate adjustment of scale of plant to each successive output. They should not be confused with the economies resulting from ‘spreading of overhead.’” Why or why not to be thus confused?

“Internal economies of large-scale production are independent of the size of output of the industry as a whole, and may be accruing to a particular concern whose output is increasing at the same time that the output of the industry as a whole is undergoing a decline.” Why or why not?

  1. Does quasi-rent have the same meaning in the following passages?

(a) “The quasi-rent of farm-buildings.”
(b) “When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labor invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different; in his case the greater part is quasi-rent.”
(c) “In relation to normal value the earnings of high ability are to one regarded as a quasi-rent rather than as a rent proper.”

  1. Is it fatal to the conception of consumers’ surplus to admit:

(a) that differences in income make it impossible to measure satisfactions;
(b) that each unit of a homogeneous supply yields ipso facto the same satisfaction as every other unit;
(c) that the satisfaction indicated by the high price paid for an article having “prestige value” will disappear when the article becomes cheap

  1. Does “capital,” as distinguished from “capital goods,” serve to synchronize the effort of labor with the reward for labor? If so, how? If not, why not?
  1. Explain the distinctions

(a) between the intensive and the extensive margins of cultivation for land;
(b) the intensive and the extensive zones of indifference in the application of labor;
(c) the marginal product of labor and the product of marginal labor.

State summarily your opinion of the usefulness of the distinctions as tools of analysis.

Mid-Year. 1935.

No. 37

Source: Harvard University Archives. Joseph Schumpeter Papers. HUC (FP) – 4.62
Box 9 (Lecture Notes), Folder “Ec11 Fall 1935”.

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Chicago Courses Economists Exam Questions Syllabus

Chicago. Course Notes. Theory of Income and Employment. Marschak. 1948.

The Cowles Commission Archive at Yale provides a copy of Income, Employment, and the Price Level: Notes on Lectures Given at the University of Chicago Autumn 1948 and 1949 by Jacob Marschak. Notes edited by David Fand and Harry Markowitz, 1951. Problems, course examination (Fall 1949) and reading list are included.

See the biographical memoir for Jacob Marschak (1898-1977) written by Kenneth Arrow to appreciate the enormous debt modern economics owes to Marschak.

From the Course Announcements this would have been Economics 335, The Theory of Income and Employment offered in Autumn and Spring quarters.  The notes explicitly refer to only the Autumn Quarters of 1948 and 1949. Oswald H. Brownlee was listed  in the Announcements for the course for the Spring Quarter in 1949.

In the Evsey D. Domar Papers at Duke University’s Rubenstein Library, Box 16 c.1, folder “Final Exams: Johns Hopkins, Stanford, U. of Michigan”, there is a one page mimeographed page of final exam questions for “Economics 335, June 17, 1948” which is the time Domar had an joint appointment Cowles Commission/Department of Economics at the University of Chicago and corresponds to the precise end of the Spring quarter. Thus I consider it highly likely to most probable that Domar taught the Spring term, 1948 of Economics 335.

Image Source: Carl F. Christ. History of the Cowles Commission, 1932-1952.

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Chicago Courses Economists Exam Questions

Chicago. Econ 332. Business Cycle Theory (Lange). Final Exam.1938

 

 

In the previous post, we encountered Martin Bronfenbrenner who was the first choice on a short-list for a position to be filled at Columbia College. In his papers archived at the Duke University Economists’ Papers Project we find a mimeographed copy of the exam for Business Cycle Theory, Economics 332 dated December 21, 1938.  Since Bronfenbrenner was a graduate student at the University of Chicago then and the course number and title exactly coincide with those of the course offered by Oskar Lange in the Autumn Quarter 1938 that ended precisely on December 21, we can confidently match the exam below to Lange’s Business Cycle Theory course.

 

From The University of Chicago, Announcements,Vol. XXXVIII,   No. 7. The College and the Divisions for the Sessions of 1938-39. (p. 325):

E. FINANCE AND FINANCIAL ADMINISTRATION
[…]

332. Business Cycle Theory.–Historical and systematic analysis of business cycle theory. The main types of explanation. Equilibrium theory and analysis of economic processes. The role of time in the analysis of economic processes. The significance of anticipations. Theoretical and observed fluctuations. The factors which determine the general level of output and employment. The fluctuations of investment and of employment. The role of technical progress. Business-cycle policy. Prerequisite: Economics 211, 301, and 330, or their equivalents. Autumn, 1:30, LANGE.

[Highlighted text was not included in the course description from the 1942 Announcements]

________________________________

December 21, 1938

ECONOMICS 332

Business Cycle Theory

  1. State Say’s law and explain under what monetary conditions it does or does not hold good.
  2. (1) What definition of saving makes saving always equal to investment?
    (2) Indicate two definitions of saving such that saving may differ from investment and explain the meaning of this difference in each case.
    (3) Give two possible meanings of the term ‘hoarding.’
  3. Explain briefly Mr. Keynes’ doctrine concerning:
    (1) the effects on employment of a general and uniform change in money wages
    (2) the effects on total employment of relative changes in money wage rates
  4. Is there any theoretical justification for dividing the business cycle into four phases? Discuss the problem on hand of any theory of the business cycle you like to choose.

 

Source: Duke University, Rubenstein Rare Book & Manuscript Library, Martin Bronfennbrenner Papers, 1939-1995, Box 24, c.1, Folder “Exams. Macro-econ cycles & fiscal policy 1951-76. 1 of 3”.

Image source: Wikipedia/commons.

 

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Chicago Exam Questions

Chicago Economics. Ph.D. Exam. Spring 1939

University of Chicago written examination questions. Part I: Economic Theory. Part II: Monetary and Cycle Theory.

 

ECONOMIC THEORY
Written Examination for the Ph.D. Degree

____________________

Spring Quarter, 1939

____________________

PART I

Time: 4 hours

Answer three questions in Group I and three questions in Group II—six questions in all.

____________________

Group I

  1. A competitive industry uses large enough fractions of the available stocks of several important types of productive services appreciably to influence the prices of these services by its own demand for them. Discuss: (a) the probable shape of the long-run supply curve of that industry’s product, and (b) the relationships between (1) that product’s long-run equilibrium price and (2) the long-run average and marginal costs for a particular concern in that industry and also for the industry as a whole.
  2. An industry produces a bulky standardized commodity, e.g., cement, and uses the base-point pricing system. Mill No. 1 is located at a base point which is one hundred miles away from the nearest mill, No. 2, and two hundred miles away from the next mill, No. 3, the three mills being situated in a straight line as follows: 1__________2____________________3. From No. 1 to No. 2 and from No. 2 to No. 3 are separate freight zones, with 25 cents a barrel rates within each zone for any distance, and 50 cents a barrel for shipments from any point in one zone to any point in the next zone regardless of distance. Mill No. 2, however, gets the 25 cents rate for shipment into either zone. You are asked by Mill No. 1 for advice as to (a) how to determine its optimum base point price, and (b) how far it should invade the market territories of Mills Nos. 2 and 3 through freight absorption, maximum net revenue being its sole objective.
    (a) How would you proceed? (What additional information would you need? How would you use it?)
    (b) Do you know of any industries whose price structure is fairly illustrated by this example?
    (c) What objections might be raised against this type of price structure from a social point of view?
  3. Suppose that frequency distributions of hourly money wage rates (a) in different crafts, (b) in different regions, in the United States were constructed for 1910 and for 1930 and that in each case the frequency distribution for 1930 showed a much greater concentration about the mean than the distribution for 1910.
    (a) Frame plausible hypotheses to explain such a trend.
    (b) Indicate in general lines how their validity might be tested.
  4. In a closed economy, with a paper standard currency fixed in quantity, a 10 per cent sales tax levied upon all final sales to consumers of tangible commodities is the only tax. There is substituted for this tax a uniform 15 per cent personal income tax, which produces and identical amount of revenue. Discuss the changes in the price structure which would probably result from the change in the method of taxation.

 

Group II

  1. Discuss the pros and cons of (a) general, and (b) selective, wage-reductions as a means of procuring fuller employment at the present stage of the depression.
  2. Distinguish between “loan-fund,” “cash-balance” (Keynesian), and marginal productivity theories of the determination of the interest rate structure, and discuss the possibility (or the need) of harmonizing them.
  3. Discuss the differences and the resemblances between the objectives and the attitudes toward free economic enterprise of the seventeenth, eighteenth century mercantilists and the present-day advocates of comprehensive economic planning.
  4. Compare the doctrines of the German historical school and the American institutionalists.

Source: Columbia University Archives, Albert Gailord Hart Collection, Box 61, Folder “Sec 2. General Exams Chicago (Micro)”

 

____________________

PART II
MONETARY AND CYCLE THEORY

Written Examination for the Ph.D. Degree

____________________

Spring Quarter, 1939

____________________

Time: 2½ hours.

Answer all four questions.

  1. Explain the doctrine of “forced saving,” and discuss its applicability to the period since 1933.
  2. Discuss and appraise the various parts of the following quotation:
    “If the quantity theory of money is true, the demand for money is taken as perfectly elastic; because human wants are indefinitely extensible, the public’s demand for money is insatiable, and prices vary directly as the quantity of money offerable. When the Austrians began to apply the marginal analysis, this commodity money having unit elasticity—a perfectly flat horizontal demand curve—naturally attracted attention.”
  3. There is a current belief among many economists that investment opportunities for the future will be so restricted as to necessitate continuous spending by governments. Indicate the factors that would have to be considered in deciding upon the merits of this contention and give your conclusion.
  4. Formulate a set of rules in accordance with which you think the gold standard would operate with a considerable degree of acceptability today; or, if you do not believe this to be possible, indicate why. You may assume that a satisfactory redistribution of gold among the nations has been achieved.

Source: Columbia University Archives, Albert Gailord Hart papers, Box 61, Folder “Exams. Chicago.”

Image: University of Chicago Photographic Archive, apf2-07443, Special Collections Research Center, University of Chicago Library.

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Chicago Exam Questions

Chicago Economics. Ph.D. Exam Questions by Viner in Theory. 1928

Transcription of handwritten draft of examination questions prepared by Jacob Viner.

Ph.D. Examination in Economic Theory

Spring, 1928             Viner[added and circled]

 

Answer questions 1 to 4, inclusive, and four others.

  1. Discuss the scope and method of the English classical school in the light of modern criticism therof.
  2. Explain, and discuss the validity, purpose, and usefulness of any three of the following Marshallian concepts:
    (a) quasi-rent;
    (b) consumers’ surplus;
    (c) unit elasticity;
    (d) maximum satisfaction;
    (e) representative concern.
  3. Describe the cost and supply aspects of the long-run equilibrium conditions under competition for two joint-products, when the proportions in which the two products are produced are: (a) non-variable, (b) variable.
  4. Discuss the contributions to economics of any five of the following:(a) Aristotle; (b) Cantillon ; (c) David Hume; (d) Cournot; (e) Senior; (f) J. B. Say; (g) Von Thunen; (h) Leon Walras.
  5. What is the significance of margins in price theory.
  6. “The price-processes of the market-place are a product of the institutional framework, and cannot be explained independently of the long evolution of the institutional framework of modern economic society which has molded them” Discuss.
  7. In what respects did the Canonists carry economic inquiry beyond its previous status?
  8. Discuss the problem of the relationship of the rate of physical productivity of capital goods to the rate of interest; or
    Discuss the supply curve of saving.
  9. Compare the wage theories of Adam Smith, Ricardo, and John Stuart Mill.
  10. Outline a research project for either:
    (a) The statistical verification of an important proposition in price theory, or
    (b) A statistical study in some phase of distribution theory.

Source:  University of Chicago. Department of Economics. Records, [Box 35, Folder 14], Special Collections Research Center, University of Chicago Library.

Image: University of Chicago Photographic Archive, [apf1-08489], Special Collections Research Center, University of Chicago Library.