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Exam Questions Johns Hopkins Money and Banking

Johns Hopkins. Semester Exams for Monetary Economics. Musgrave, 1959-1960

 

From 1958 through 1962 Richard Musgrave was Professor of Economics at Johns Hopkins. One thinks of him today as a giant in the history of public finance but the examination below reminds us that he was also an economist who still taught graduate courses in monetary economics/policy at least into the early 1960s.

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More about Richard Musgrave

All posts with the tag “Musgrave” here at Economics in the Rear-view Mirror.

In particular one post with biographical and career information.

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Richard Musgrave
Faculty of Arts and Sciences — Memorial Minute

At a Meeting of the Faculty of Arts and Sciences April 8, 2008, the following Minute was placed upon the records.

Richard Musgrave, the Harold Hitchings Burbank Professor of Political Economy, Emeritus, was the leading public finance economist of his generation. He died on January 15, 2007, at the age of 96.

Richard Abel-Musgrave was born in Königstein, Germany, and educated in Munich and Heidelberg. He was of half Jewish ancestry, his paternal grandfather and maternal grandmother both being Jews who had converted to the Christian faith.

He came to the United States in 1933 as an exchange student at Rochester University but soon transferred to Harvard where he received his PhD in 1937. He decided not to return to Germany and applied for U.S. citizenship in that same year. At that time he dropped the hyphen in his family name, becoming Richard Abel Musgrave. He was known thereafter as Richard Musgrave.

After completing his PhD, Musgrave worked at the Board of Governors of the Federal Reserve until 1948. He then taught at Johns Hopkins, the University of Michigan and Princeton before joining the faculty at Harvard in 1965. He held simultaneous appointments in the economics department and in the Harvard Law School, the first person to hold a joint appointment in both the Faculty of Arts and Sciences and the Law School. Professor Musgrave took emeritus status in 1981 and moved to California where he was an adjunct professor at the University of California at Santa Cruz.

Although the 19th-century giants of political economy, David Ricardo and John Stuart Mill, wrote extensively about the theory of taxation, by the middle of the 20th century the teaching and writing on public finance in the United States was largely descriptive and institutional. Richard Musgrave changed all of that with his major volume, The Theory of Public Finance, published in 1959.

The Theory of Public Finance was both a theoretical research monograph and a text book. It applied the analytic tools of price theory and of Keynesian macroeconomics to the issues of tax incidence (i.e., who bears the burden of taxes), of efficiency (i.e., measuring the losses caused by the distorting effects of taxes), and of achieving full employment. All of this was done in a very readable and accessible way that made the book very widely studied. The book proved to be a particularly significant resource for tax law professors in their teaching and writing about federal tax policy.

A key feature of Musgrave’s Theory of Public Finance was the division of the problem of public finance into what Musgrave called three “branches.” One “branch” was devoted to the problem of achieving full employment. Here Musgrave applied the ideas of Keynesian fiscal policy to using tax reductions and government spending to increasing aggregate demand. A second “branch” focused on economic efficiency, i.e., on the design of taxes that would raise revenue with the least distortion to incentives and therefore the least loss of real incomes. The third “branch” then dealt with issues of redistribution to achieve a politically acceptable distribution of income. These branches were of course just pedagogical devices and not a way of organizing the actual making of policy.

Richard Musgrave was an inspiring teacher. It was clear to his students that he cared about both the analytic science in public finance and the practical implications of that analysis for improving our tax system. He taught students to think about the impact of taxes on economic efficiency while not losing sight of their distributional consequences. Or, as he might have said, to think about the distribution of the tax burden and the use of taxes and transfers to redistribute income while not losing sight of the consequences of the progressive tax and transfer structure on economic efficiency.

In the weekly graduate seminar in public finance, graduate students and visiting faculty would present their latest research. The seminar brought together not only graduate students and faculty from the department of economics, but also tax specialist members of the Harvard Law School faculty. Their presence added a greater degree of practical focus to the seminar’s discussion of tax reform. Musgrave’s questions and insights kept the seminar focused on the substantive importance of the problems rather than on the more abstract methodological issues. Many of the students taught by Richard Musgrave went on to do important work in public finance.

Although Musgrave felt strongly about tax policy and about transfer programs like Social Security and unemployment insurance, he was not an activist who tried to influence outcomes in Washington. He appeared to believe that he was most effective in developing the analysis and teaching students who would carry this material into practice.

An important exception to this was a major report on fiscal reform in Columbia that Musgrave prepared jointly with Malcolm Gillis in 1971. This report, prepared under the auspices of the Harvard International Tax Program of the Harvard Law School, was based on extensive and detailed work in Columbia.

Richard Musgrave was elected a Distinguished Fellow of the American Economic Association in 1978. Musgrave was one of the organizers of the International Seminar in Public Economics which brought together American and European faculty members who specialized in public finance. He also served as an honorary president of the International Institute of Public Finance.

Professor Musgrave collaborated with his wife, Peggy Musgrave, in writing a popular undergraduate text book, Public Finance in Theory and Practice, which was published in 1973. The Musgraves also found time to reach out to young colleagues and their wives at their homes in Belmont and in Vermont.

Respectfully submitted,

Lawrence Summers
Bernard Wolfman
Martin Feldstein, Chair

Source: The Harvard Gazette. June 12, 2008.

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THE JOHNS HOPKINS UNIVERSITY

Economics 611
Final Examination
Prof. R. A. Musgrave
January 22, 1960

I

Write for forty-five minutes.

There is by now pretty general agreement, among monetary theorists, regarding the various relationships by which the supply of money may affect the level of output and prices. Nevertheless, there remains a division between those who prefer to study the role of money in the framework of an income-expenditure approach, and those who prefer the quantity theory of equation of exchange tradition. What, if any, substantive justification is there for retention of this dichotomy? If there is none, which approach is to be retained? If there is, what distinct purposes are served by the two approaches?

II

Write on two out of the following three questions, thirty minutes each,

  1. Various writers, including Wicksell, Fisher and Keynes, have treated the problem of monetary disequilibrium and the nature of the equilibrating process, in terms of the differential between two rates of interest. Discuss these approaches and compare the concepts of interest used therein.
  2. Where do you stand on the loanable funds—liquidity preference controversy? In particular, are you satisfied that the distinction between the stock and the flow approach to monetary theory is purely terminological?
  3. “It was a great misfortune for the development of monetary theory, that Marshall and Pigou did not stick with their initial intent to relate k to wealth, but proceeded to relate it to income. Thereby was postponed the recognition — so essential for a fruitful approach to monetary theory — that the demand for money must be dealt with in the context of a general portfolio theory.” Discuss.
III

Write on the following three statements, for fifteen minutes each. Indicate whether the statement is right or wrong and why.

  1. “The real balance effect implies that the demand schedule for money has unit elasticity, from which it follows that the price level changes proportionately with the money supply.”
  2. “The liquidity trap is a necessary but not a sufficient condition for under-employment equilibrium.”
  3. “Classical theory was mistaken in assuming that the rate of interest is determined by income independent of money supply. As Keynes has shown, interest is determined by money supply and then determines income.”

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Dr. R. A. Musgrave
Friday, May 20, 1960

ECONOMICS 611
  1. The following changes occur: Bill holdings at the Federal Reserve rise by 100 million, while bond holdings fall by 80 million. Also, bank holdings of bills fall by 70 million, non-bank holdings of bills fall by 30 million, and non-bank holdings of bonds rise by 80 million. What is the resulting change in excess reserves, assuming a reserve ratio of 20%, and why? (Assume that the system retains such changes in excess reserves as result, without reacting with corresponding changes in loans.)
  2. Assume that the system is always loaned up. What will be the effects on member bank reserves and demand deposits of (a) an increase in vault cash by 100; (b) a decrease in currency in circulation by 200; (c) a gold outflow of 300; (d) a decrease in treasury deposits at commercial banks by 500. The reserve ratio is again 20%.

Source: Johns Hopkins University. The Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy [Records], Series 6/7, Box 3, Folder “Department of Political Economy, Graduate Exams 1933-1965”.

Image Source: Richard A. Musgrave page at the University of Michigan’s Faculty History Project.

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Exam Questions Johns Hopkins Theory

Johns Hopkins. Exam for Welfare Economics. Lerner, 1958

 

Abba Lerner changed his academic locations (including leaves of absence to accept visiting positions) with a frequency rivaled by few. The academic year 1957-58 found him visiting the department of political economy at Johns Hopkins University. The artifact for this post is the final examination for Lerner’s course on welfare economics.

Lerner’s notes for seminars on social welfare functions held at the IMF and at the Cowles Commission in  1952.

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THE JOHNS HOPKINS UNIVERSITY
Welfare Economics
18-640

Final Examination May 20th 2-5 p.m., 1958.
Abba P. Lerner

Answer four questions, in separate blue books, in ink.

  1. Discuss the meaning, the validity and the significance of the proposition that it is impossible to derive a social welfare function from individual preference functions.
  2. How far can one carry the analogy between a political voting procedure and the economic price mechanism, and between the rationale of voting between alternative policies and that of allocating dollars between alternative purchases?
  3. Discuss the rational elements in relation to other elements in the social objectives of optimum distribution of income, optimum population, and optimum rate of saving.
  4. What is sound, what is unsound, and what is useful in the doctrine of consumers’ surplus?
  5. Why is it socially desirable to have the prices of products equal to the value of the marginal factors used in their production? How is this objective affected by equity elements such as the need for subsidies?
  6. Under what conditions would a partial freeing of trade be harmful to society in the largest sense? In your answer explain the treatment of this problem in terms of “second best” and the use of the concept of “divergence”.
  7. Compare the arguments for the imposition of trade restrictions for the sake of affecting the international terms of trade with those undertaken for the sake of affecting the domestic distribution of income. Give special attention to the interdependence of efficiency and equity considerations.

Source: Johns Hopkins University. The Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy [Records], Series 6/7, Box 3, Folder “Department of Political Economy, Graduate Exams 1933-1965”.

Image Source: Photograph of Abba Lerner printed in an announcement for his speech “Israel—The Next Ten Years” (February 25) at the 1958 Forum presented by Beth Emet the Free Synagogue (Evanston, Illinois). Library of Congress, Manuscript Division. The Papers of Abba P. Lerner, Box 6, Folder 8 “ ‘B’ miscellany”. A copy of the announcement was posted by Ellen Blum Barish in Tablet (January 14, 2014).

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Exam Questions Harvard Law and Economics

Harvard. Principles of industrial relations and commercial law, Exams. Wyman, 1904-1905

 

The economics department at Harvard at the start of the 20th century offered a course taught by the Law School assistant professor, Bruce Wyman (b. 15 June 1875; d. 21 June 1926), to provide future businessmen an overview of commercial and industrial relations law. Students expecting to go to study law were explicitly not encouraged to take the course.

An earlier post begins with the long personal report Wyman wrote about his life and career for the 25th anniversary of his Harvard Class of 1896. 

Bruce Wyman pops up in an even earlier post. Harvard President Lowell complained to Professor Frank Taussig about Wyman’s course in the economics department having too soft a grade distribution (making it a “snap” course). Also we learn there the somewhat scandalous circumstances that led to Wyman’s forced resignation from his Harvard Law professorship in December 1913.

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Wyman’s exams from earlier years

1903-04
1902-03
1901-02

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Course Enrollment
1904-05

Economics 21. Asst. Professor Wyman. — Principles of Law governing Industrial Relations and Commercial Law.

Total 182: 14 Graduates, 65 Seniors, 76 Juniors, 15 Sophomores, 12 Others.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 75.

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Course Description
1904-05

[Economics] 21. Principles of Law governing Industrial Relations. — Commercial Law. — Competition and Combination. Mon., Wed., and (at the pleasure of the instructor) Fri., at 11. Asst. Professor Wyman.

Course 21 is open to those students who will complete their undergraduate work in 1904-05.

This course considers certain rules of the law modern trade and the governing the course of organization of modern industry. The commercial law is thus taken up at large in its application to the conduct of modern business. The aim of the course is to give to students who mean to enter business life some contact with the law and some understanding of the legal point of view; at the same time the problems brought forward are actual and the rules of law discussed are specific, so that the instruction may prove of service in a business career. The course forms a natural introduction to the study of law, as it involves most of the elementary principles in one way or another. As the course deals with adjudication and legislation on questions of first importance in the economic development of modern times, it may also be of advantage to all those who wish to equip themselves for the intelligent discussion of issues having both legal and economic aspects.

In 1904-05 five principal topics will be discussed: Competition — Combination — Association — Consolidation — Regulation. The conduct of this course will be by the reading and discussion of cases from the law report. The cases selected cover the whole course of the industrial organization, so that both fact and law involved are informing.

Source: Harvard University. Faculty of Arts and Sciences. Division of History and Political Science Comprising the Departments of History and Government and Economics, 1904-05 (May 16, 1904), pp. 48-49.

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ECONOMICS 21
Mid-year Examination, 1904-05

Answer all questions.

In the case of each question give a specific answer about one line in length, then proceed in subsequent paragraphs to discuss the matter involved both upon principle and upon authority.

  1. A is the manufacturer of the X infants’ food; B is the manufacturer of the Z infants’ food. B inserts an advertisement in various magazines, which contains the following clause: — “The Z food is twice as nutritious as the X food.” A sues B for the publication of this statement; in this suit he offers to prove by expert testimony that the X food is in fact more nutritious than the Z food. The court is asked by B to dismiss the action of A. What result?
  2. A is a workman employed in the works of B. B carries an indemnity policy covering accidents, written by C. A gets his hand crushed in one of the machines, which is improperly guarded. C attempts to make a settlement with A at $500, which A refuses; thereupon C threatens to get A discharged by B, but A still refuses to compromise. Next, C goes to B and demands that A be discharged. B is at first unwilling, but when C threatens to take advantage of the clause in the policy permitting cancellation of the policy upon five days’ notice, B reluctantly undertakes to discharge A at the end of the week for which he is employed, protesting that A is a good workman and he had intended to give him regular employment. After A is thus discharged he brings suit against C for damages for loss of his employment. What result?
  3. A is a manufacturer of tomato catsup. He puts his product on the market in a tapering bottle with a screw cap of tin; this bottle he packs in a round pastboard carton covered with manila paper; on the wrapper is a picture of a bottle filled with red catsup, around which in black type are the brand and address. B another manufacturer of tomato catsup puts his product on the market in much the same way — in a tapering bottle with a screw cap of tin, wrapped in a round carton of pastboard with a label showing a bottle of red catsup, but with the name of his brand in plain black letters, as also his own name and address. A seeks an injunction against B. What result?
  4. The North American Soap Company is organized under the laws of New Jersey. It buys from A, B, C, D, E, F, and G, who are the principal manufacturers of soap in the United States, all of their soap factories. The North American Company in the case of each purchase from A, B, C, D, E, F, and G takes an agreement from each not to engage in the soap business for ten years in the United States. The scheme of the promoters is to get control of the market by this process. B starts a large soap factory in New York two years later. Can he be stopped by injunction?
  5. A is a dealer in coal in San Francisco. An agreement is made between B, C, D, E, F, and G, who are the principal dealers in coal in that city that they will sell for one year at prices to be fixed by the majority. The combination then votes to cut prices 20% for the next 4 months. At the end of 3 months, A’s capital is exhausted by this cut throat competition, and he retires from business a ruined man. A now brings suit against B for his losses. What result?
  6. In a certain factory operated by X, A is employed by the week with 300 others, among whom are B, C, D, E, F, and G. B, C and D propose the organization of a trades union which every employee joins, except A who refuses. The trades union, at an early meeting, votes unanimously that theirs must be a union shop. The committee accordingly waits on X and informs him that unless A is discharged a strike will be called at the end of the week. X reluctantly discharges A at the end of the week. A now sues G for damages. What result?
  7. The X hotel corporation is duly organized by A, B, and C. It builds a hotel the next year. Three years later A buys from B and C all of their stock. The next week A executes a mortgage upon the hotel property to the Y bank to secure a loan himself of $10,000; this is signed: — “X company, by A.” The week following, A transfers one share to M and another to N. A meeting of the shareholders in the X corporation is then called, A, M, and N attending; at this meeting it is unanimously voted to borrow $10,000 from the Z bank and to execute a mortgage upon the corporate property to secure the loan, which A is authorized to execute in the name of the company. This mortgage upon the hotel property is accordingly executed to the Z bank, being signed: — “X company, by A.” Which of these mortgages, the Y bank or the Z bank, will come out ahead, if the hotel property is only worth $15,000, not enough to pay both?
  8. The X corporation is organized with a capitalization of $100,000; its shares are subscribed on the basis of 50% paid down, and all are issued. A year later it issues $50,000 in first mortgage bonds, and the next year $20,000 in second mortgage bonds. In the third year it goes into insolvency owing $60,000 to general creditors for goods. The sale of its properties realizes $50,000. In the final winding up how do the following parties come out: the first bonds? the second bonds? the general creditors? and the stockholders?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 7, Bound Volume: Examination Papers, Mid-Years 1904-05.

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ECONOMICS 21
Year-end Examination, 1904-05

Answer all questions. Give full reasons. Cite some authorities.

  1. Can the following be stopped as unfair competition:—
    (1) One steamship company gives a rebate of 25% to those shippers who agree to give all their business and not to deal with a rival steamship company; (2) A tobacco manufacturer gives jobbers 5% discount extra if they will agree not to handle any goods of rival companies which sell for less than its own brands; (3) A manufacturer of shoe machinery who sells his machines only upon an agreement by the purchaser to buy the staples fed into it of the manufacturer finds that a rival manufacturer is offering staples at 25% off; (4) An oil corporation controlling 80% of its market reduces prices 50% in districts where competitors appear while raising prices 50% in districts where competition has been crushed out; (5) A gas company decides not to deal with any applicant who has had electricity put in by a rival company.
  2. Eight corporations, constituting eighty per cent. of the soap manufacturers of the United States form a partnership to handle sale. Each corporation pays in $10,000 as working capital. It is provided that every manufacturer in the partnership shall have the right to run his own works in his own way, producing as much as he pleases, selling at what price he pleases. But it is further provided that every manufacturer shall pay to the treasurer of the partnership 2½ cents per lb. upon all soap made and sold by him. By another clause any member of the association has the right to withdraw at the end of any quarter. At the end of each quarter, it is stipulated, the treasurer shall pay over to each member of the partnership a share of the fund thus accumulated pro rata according to the capacity of his plant. At the end of the first quarter the X corporation, a member, withdraws; it has paid into the partnership $322; the pro rata share due is $5800. The X corporation now asks counsel what its rights are (1) To the $322; (2) To the $5800; (3) As to the $10,000; (4) Suppose the partnership were insolvent, what would be the respective rights of the X corporation and the general creditors of the partnership? (5) If the X corporation is content to remain in the arrangement, can its dissenting majority stockholders who believe the policy unsafe force it to withdraw?
  3. A and B are co-partners engaged in cotton spinning. One C comes to A and B, whom he finds together in the office of the firm, and offers them 10,000 bales of cotton at 11c. per lb. This is a very large purchase for this firm to make, and the price is rather high as the price is falling. The proposition appeals to A, who says to B, “shall we take the cotton?” B says, “No.” Then A turns to C, who has heard all, and says “we need that cotton, despite what B says, and we will sign a contract with you;” thereupon, against the continued protests of B, A and C executed a contract for the cotton. A signs it, “A & B by A,” B forbidding him to do so to the last. The partnership later refuses to carry out the contract; C sues B for the damages caused by the breach. (1) What result in case as stated? (2) Suppose the partnership was buying a large amount of cotton in order to corner the market, which fact was unknown to C; (3) Would your answer be different if A and C had contracted for the cotton in B’s absence, A secretly intending to sell the cotton and run away with the proceeds? (4) Suppose while A and C were contracting, but before they had struck the bargain, B died without either knowing it; (5) Suppose the purchase price of the cotton was higher than the market, it being understood that in consideration of this C should cancel a debt of $4000 which A owed him.
  4. A buys a mining claim for $8000; he sells it to B and eight others for $12,000, who agree that if they are successful in unloading it upon a corporation which they are planning to form for that purpose he shall have the same share of profits that the rest get. After trying to sell it to various other people for $12,000 and failing to do so (the best offer they can get is $4000) they all form the X corporation with their office boys as stockholders and directors, who vote to buy the mining claim of them for $62,000. The mine when developed by the people who buy into the X company turns out to be worth $500,000 at the least calculation. (1) What are the rights of the X company against A? (2) Suppose it had turned out to be worth only $1000? (3) Suppose the X corporation had already been formed by other parties before this syndicate was made up and that the directors for the time being had foolishly bought the property from the syndicate for $62,000 when most people would say that it was only worth $8000, what could the stockholders of the X company do about it? (4) Suppose B happened to be one of this board of directors, what would be the rights of the stockholders of the X company? (5) Suppose B happened to be a stockholder in this X corporation that bought the mining claim under the circumstances described in (3), could minority stockholders in the X corporation which had voted by a small majority (which included B’s vote) prevent the purchase from being carried through?
  5. Three gas companies, — the A Co., the B Co., and the C Co., are engaged in supplying gas in a certain city. The principal stockholders are friendly, and they desire to consolidate. The following schemes are proposed; how many of these may be put through in any way (a) if every stockholder in the A Co., the B Co., and the C Co. is willing? (b) if minority stockholders dissent? (1) The first scheme proposed is to have the shares in the constituent companies conveyed to a board of three trustees who shall issue trust certificates retaining the voting powers; (2) the second scheme proposed is to have the shares sold to a holding corporation organized to buy them, the shareholders in the a holding constituent companies being offered either the market price of the shares in cash or in shares in the holding corporation; (3) the third scheme proposed is for the constituent companies to vote to sell all their property and franchises for cash to a new corporation organized to buy the properties, the cash to be distributed to the stockholders in the old companies pro rata; (4) the fourth scheme proposed is for the shareholders in the constituent companies to agree to elect identical boards of directors in accordance with a vote among themselves; (5) a fifth scheme is for the A Co. and the B Co. to execute leases of all of their properties to the C Co.
  6. Are the following laws constitutional or do they deprive of life, liberty, and property without due process of law?: (1) prohibiting any manufacturing corporation from stipulating in any employment contract that one half of the employee’s pay shall be in orders for supplies from the employer’s general store; (2) forbidding the manufacture of clothing in any room in any tenement house; (3) forbidding the running of a department store, which is defined as an establishment where two of the following businesses are carried on: the sale of foods, the sale of dry goods, the sale of furniture, the sale of hardware; (4) prohibiting the sale of oleomargarine colored yellow, and requiring any one who sells it to put a sign out which shall say in letters one foot high “Oleomargarine sold here”; (5) making eight hours the limit of time for which any one may be employed to work in any factory.
  7. Are the following refusals to enter into business relations legal? (1) By a telephone company which will install an instrument in the office of only one telegraph company; (2) by a railroad which will only allow one telephone company to establish a pay station in a union station; (3) by an electric company which refuses to furnish electricity for power; (4) by a sleeping car company which after assigning a traveller to “lower 5” reassigns him half an hour later to “upper 8” without making any explanation; (5) by a railroad which refuses to furnish facilities for doing the express business itself upon the ground that it has entered into an exclusive arrangement with one express company.
  8. Do the following constitute illegal discriminations in commercial dealings? (1) By a steamship company which gives 20 per cent. rebate to all shippers who ship 1000 tons per year; (2) by a railroad which charges ten cents excess fare to passengers who have no tickets, even if they have found the ticket office closed; (3) by a hotel keeper who refuses to take in late at night a man and his wife who find themselves unable to get into their own house nearby because they have lost their key; (4) by a gas company which refuses (although offered prepayment) to sell gas to a rival company; (5) by a gas company which finds itself unexpectedly unable to supply its customers; (6) by an electric company which makes it a rule to supply the transformer free to such applicants only who have the wiring of their houses done by it.

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1905), pp. 38-42.

Image Source: Lithograph by John Jepson “Harvard scores” published in 1905. From the Library of Congress Prints and Photographs Division Washington, D.C. 20540.

 

Categories
Exam Questions Harvard

Harvard. Accounting principles. Enrollment and final exam. Cole, 1904-1905

“Principles of Accounting” was one of three courses offered by the department of economics that were specifically targeted to advanced students who intended to start business careers after graduation. William Morse Cole, A.M. was the instructor. An earlier post provides an overview of his career.

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From previous years…

1900-01
1901-02
1902-03
1903-04

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Course Enrollment
1904-05

Economics 18 1hf. Mr. W. M. Cole. — Principles of Accounting.

Total 27: 7 Graduates, 14 Seniors, 2 Juniors, 1 Sophomore, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 75.

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Course Description
1904-05

[Economics] 18 1hf. The Principles of Accounting. Half-course (first half-year). Mon., Wed., and (at the pleasure of the instructor) Fri., at 3.30. Mr. W. M. Cole.

This course is designed primarily for students who expect to enter a business career, and wish to understand the processes by which the earnings and values of industrial properties are computed. It is not intended to afford practice in book-keeping, but to give students a grasp of principles which shall enable them to comprehend the significance of accounts.

In order that students may become familiar with book-keeping terms and methods, a few exercises will be devoted to a brief study of the common systems of recording simple mercantile transactions. The chief work of the course, however, will be a study of the methods of determining profit, loss, and valuation. This will include an analysis of receipts, disbursements, assets, and liabilities, in various kinds of industry, and consideration of cost of manufacture, cost of service, depreciation and appreciation of stock and of equipment, interest, sinking funds, dividends, and the like. Published accounts of corporations will be studied, and practice in interpretation will be afforded. Attention will also be given to the functions and methods of auditors.

The instruction will be given by lectures, discussions, reading, and written work.

Course 18 is open to Seniors and Graduates who have taken Economics 1.

Source: Harvard University. Faculty of Arts and Sciences. Division of History and Political Science Comprising the Departments of History and Government and Economics, 1904-05 (May 16, 1904), pp. 47-48.

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ECONOMICS 18
Mid-year Examination, 1904-05

  1. Construct an imaginary trial balance of at least eight items, of which not over three shall represent persons or corporations.
  2. In a proprietor’s absence the books of a business are opened and kept by a bookkeeper who keeps accurate record of transactions reported to him but cannot be trusted to figure valuations or profits. At the end of a year, the records show, before the books are closed and simply as the result of regular transactions, the following figures:
    Proprietor’s investment, $100,000; Bills Payable, $17,000; Bills Receivable, $26,000; Real Estate, $20,000; Accounts Payable, $15,000; Accounts Receivable, $20,000; Cash, $5,000; Merchandise on hand, valued at cost, $75,000; Merchandise Dr. on ledger, $49,500; Expense, $12,000; Interest balance received, $500.
    Now the proprietor returns and wishes to close his books for the year. If he needs any information not given above, what questions will he ask in obtaining it? Assume any fairly reasonable answers to such questions, if any, and then show what is the proprietor’s present investment in the business.
  3. The annual report of a corporation shows the following figures: Profit and Loss credit balance at the beginning of the year, $20,000; Merchandise profit, $140,000; Expense, $100,000; appreciation of Real Estate, $10,000; permanent Surplus set aside at the end of the year, $15,000; Dividends, $50,000. Present in rough ledger form i.,e. debit and credit items, the Profit and Loss account for the year, showing the balance at the end of the year.
  4. Explain the significance of each of the following accounts appearing, with a balance on the side indicated, on (1) a balance sheet for the beginning of a new fiscal year, and (2) a trial balance taken in the ordinary course of business during the year: Wages, Cr.; Interest, Dr.; Merchandise, Dr.; Profit and Loss, Dr.; Reserve Fund, Cr.; Supplies, Dr.
  5. An annual report of a corporation shows, either on the income sheet or on the balance sheet, an item of which the title means little or nothing to you, e.g., “Pro rata share of bonds of H.R.L. Co.” Assuming the accounts to be kept properly, explain to what extent the position and the treatment of the item throw light upon its character.
  6. A corporation shows the following statements:—
1903. 1904.
Plant $450,000 $440,000
Supplies 59,000 27,000
Real Estate 100,000 95,000
Cash 15,000 15,000
Bills Receivable 50,000 60,000
Accounts Receivable 20,000 15,000
Merchandise 83,000 108,000
Capital Stock 500,000 500,000
Bills Payable 150,000 150,000
Accounts Payable 100,000 90,000
Wages 7,000 10,000
Profit and Loss 20,000 10,000
Proceeds from sales 600,000
Direct cost of production 500,000
General expenses, fixed charges, etc. 70,000

Tell all you can about the history of the corporation for the year 1903-04.

  1. If bonds on hand were bought at a premium, should that fact show upon the income sheet or in any way affect it?
  2. The books of three concerns are open to your inspection. Outline briefly a scheme for consolidating the three concerns into a corporation.
    [Do not allow yourself to get involved in the fascinating details of such a scheme at the expense of time needed for other things. This may well be left for surplus time and energy. Bookkeeping entries are not required. Show how the accounts of the three concerns can be interpreted for such a purpose.]

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1905), pp. 37-38.

Image Source: Harvard Alumni Bulletin, Vol. XIX, No. 16, p. 308. Portrait of William Morse Cole colorized by Economics in the Rear-view Mirror.

Categories
Exam Questions Harvard Money and Banking Public Finance

Harvard. Course description, enrollment, exam questions for history of public finance. Bullock, 1904-1905

Step by step, inch by inch, course by course we transcribe and file away course materials from academic years gone by. Again we encounter Harvard assistant professor of economics, Charles Jesse Bullock, this time wearing his public finance hat. Note that at the turn of the twentieth century monetary and fiscal issues were taught as two sides of a single financial history.

__________________________

Previously…

1903-1904 enrollment and final exam questions.

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Course Enrollment
1904-05

Economics 16 1hf. Asst. Professor Bullock. — Financial History of the United States.

Total 6: 4 Seniors, 1 Junior, 1 Other.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 75.

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Course Description
1904-05

[Economics] 16 1hf. The Financial History of the United States. Half-course (first half-year). Mon., Wed., and(at the pleasure of the instructor) Fri., at 1.30. Asst. Professor Bullock.

This course will deal mainly with the history of the finances of the federal government; but will include some study of the financial experience of the colonies, and will treat of the development of the finances of the states from 1775 to 1850.
Each student will be required to prepare a thesis upon some special topic.

Source: Harvard University. Faculty of Arts and Sciences. Division of History and Political Science Comprising the Departments of History and Government and Economics, 1904-05 (May 16, 1904), p. 46.

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ECONOMICS 161
Mid-year Examination, 1904-05

FINANCIAL HISTORY OF THE UNITED STATES.
  1. Describe the development of colonial tax systems.
  2. State the main facts concerning the Continental paper money.
  3. Describe Hamilton’s funding system.
  4. Describe and criticise the sinking-fund act of 1795.
  5. What are the main facts in the history of the Second Bank of the United States?
  6. Describe the tariffs of 1828, 1838, and 1846.
  7. What are the main facts in the history of the greenbacks?
  8. Discuss the suspension of specie payments in December, 1861.
  9. Describe the refunding of the national debt after the Civil War
  10. What were the chief provisions of the resumption act? How was resumption actually accomplished?

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1905), p. 36.

Source: Williams College, The Gulielmensian 1902, Vol. 45, p. 26. Colorized by Economics in the Rear-view Mirror.

Categories
Exam Questions Harvard History of Economics

Harvard. Exams for the history of economics through Adam Smith. Bullock, 1904-1905

 

Meanwhile, back in the early 20th century we find Charles Jesse Bullock teaching the history of economics from the ancient Greeks to Adam Smith, judging from his exam questions. Nominally, the course was to cover economic thought through 1848. He, like Frank Taussig, examined economics Ph.D. candidates ability to read French and German. He taught Latin and Greek at the high-school level before going on to study economics so it is not surprising that he would have been expected to cover the ancient Greek and Latin literatures of economics as well.

The year-examination for this course in 1903-04 has been posted earlier.

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Course Enrollment
1904-05

Economics 15. Asst. Professor Bullock. — History and Literature of Economics to the year 1848.

Total 3: 3 Graduates.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 75.

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Course Description, 1904-05

[Economics] 15. The History and Literature of Economies to the year 1848. Mon., Wed., and (at the pleasure of the instructor) Fri, at 12. Asst. Professor Bullock.

The purpose of this course is to trace the development of economic thought from classical antiquity to the middle of the nineteenth century. Emphasis is placed upon the relation of economics to philosophical and political theories, as well as to political and industrial conditions.

A considerable amount of reading of prominent writers will be assigned and opportunity given for the preparation of theses. Much of the instruction is necessarily given by means of lectures.

Source: Harvard University. Faculty of Arts and Sciences. Division of History and Political Science Comprising the Departments of History and Government and Economics, 1904-05 (May 16, 1904), pp. 49-50.

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ECONOMICS 15
Mid-Year Examination, 1904-05

  1. With what literature upon the history of economics are you familiar?
  2. What place does Plato occupy in the development of economic thought?
  3. What criticism did Aristotle make against Plato’s Republic?
  4. What economic topics are discussed by Xenophon?
  5. Describe the economic doctrines of Thomas Aquinas.
  6. What do you think of the scholastic doctrine concerning usury?
  7. What were the doctrines of Molinaeus and Salmasius?
  8. Compare the Utopia with Plato’s Republic.
  9. What do you think of Ingram’s treatment of economic thought in the Middle Ages?
  10. Upon what subject do you consider the economic doctrine of the Schoolmen most satisfactory?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 7, Bound Volume: Examination Papers, Mid-Years 1904-05.

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ECONOMICS 15
Year-end Examination, 1904-05

  1. What influence did the schoolmen have upon the economic thought of the sixteenth and seventeenth centuries?
  2. Compare the contributions to economic thought made by English writers in the seventeenth century with those made by contemporaneous writers in France and Italy.
  3. Give some account of the economic doctrines of Bodin.
  4. Trace in outline the development of theories of money in Europe from 1550 to 1760.
  5. Compare the communistic theories of Plato with those of More.
  6. Describe the work done in the eighteenth century toward systematizing economic doctrines.
  7. Describe the economic doctrines of two German and two Italian writers of the eighteenth century.
  8. Give a general account of the life and writings of Adam Smith.
  9. What different influences can be observed in the Wealth of Nations? To which do you attribute most importance?

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1905), pp. 35-36.

Source: Williams College, The Gulielmensian 1902, Vol. 45, p. 26. Colorized by Economics in the Rear-view Mirror.

Categories
Exam Questions Suggested Reading Syllabus Theory

Queens College. Reading assignments and exams for macroeconomics. Lerner 1973-1975

Economics has its share of Wunderkinder, “Primo Donnos”, and heterodoxic poseurs. It is also a fact that economists are overwhelmingly herd animals. From time to time we find a genuine maverick among us, Abba Ptachya Lerner could be designated the poster-child of maverick economists. 

In this post Economics in the Rear-view Mirror has assembled material over three consecutive years from his seminar in advanced macroeconomic theory offered at Queens College of the City University of New York from the 1970s. Class schedules, assigned readings, midterm and final exams are transcribed here from the Spring terms of 1973 through 1975.

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Course Description (1974)

Economics 710, 80:
Seminar in Advanced Macroeconomic Theory
Abba Lerner

An integration of the theories of employment, inflation, interest, capital, investment, and growth, and new lessons for the uses of monetary policy, fiscal policy, and price policy. The Keynesian revolution (interpretations and misinterpretations—general theory or special case?), pre-Keynesian, Keynesian, and post-Keynesian economics. International complications and the myth of international money.

Basic Reading
Ackley Macroeconomics
Keynes The General Theory of Employment, Interest and Money
Leijonhufvud On Keynesian Economics and the Economics of Keynes
Lerner “Money” (Encycl. Britt., 1946 ed.)
Everybody’s Business
Flation
Other Suggested Readings
Lekachman Keynes’ General Theory – Reports of Three Decades
Harrod Life of Keynes
Lerner The Economics of Employment

There will be one midterm test and a final Examination.

Source: Queens College of the City University of New York. Economics, Spring 1974 (Economicsdepartment brochure), p. 20. Copy in Papers of Abba P. Lerner, Box 17, Folder 6 “Queens College of the City University of New York: General”, U. S. Library of Congress, Manuscript Division.

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1973

QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710, 80: Advanced Macroeconomic Theory
Inflation, Employment and Growth
Seminar, Spring 1973

Prof. Abba Lerner
Th. 6:30-8:20 P.M.
SS 314

Reading
Branson Macroeconomics Theory and Policy
Harper & Row		 (B)
Lerner Flation
Quadrangle Books		 (F)
Lerner Everybody’s Business
Harper Torchbooks (paperback)		 (EB)
Lerner Money
(Encycl. Britt 1946 edition)		 (M)
Leijonhufvud On Keynesian Ecs & the Ecs of Keynes
Oxford U P		 (L)
Keynes The General Theory of Interest and Money (sic)
Harcourt Brace		 (K)
Tentative Outline
Week Date
1 Feb. 8 Introduction B:1-3 / M / EB:X.
2 15 The Classical Case B:4-6 / F:1-5 / K.
3 22 Static Equilibrium B:7-9 / F:6-7 / K.
4 Mar 1 Consumption and Investment B:10,11 / K.
5 8 Money B:12,13 / M / K.
6 15 Monetary & Fiscal Policy B:14 / K.
7 22 The Foreign Sector B:15 / F:16,17 / K.
8 29 International Money F:18-20 / K.
9 Apr 5 Inflation B:16 / EB:XI / F:8-15 / K.
10 12 Unemployment Disequilibrium L: I and II / K.
11 19 Macromodels L: III / K.
12 26 Liquidity Preferences L:IV / K.
13 May 3 Keynes and Post Keynes L:V and VI / I(sic).
14 10 Growth Models B:17-19.
15 17 Optimum Growth Models B:20-23.
Other Suggested Readings
Lerner Economics of Employment
Ackley Macroeconomics
Lekachman Keynes’ General Theory – Reports of Three Decades
Lekachman The Age of Keynes
Harrod Life of Keynes

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 4 “Queens College of the City University of New York: Course outlines. 1971-77, n.d.”.

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QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710 and 80
Prof. A. Lerner
Midterm Examination
March 22, 1973

Answer two questions from each Part

PART ONE

  1. M = 300, V = 4, C(Y) = 5/6, I = 300 – 10i
    (I = Investment), (1 = rate of interest)
    What would be the equilibrium values of Y, i, I, and S?
    What would happen to those if

    1. there was an increase in liquidity preference?
    2. M was increased to 450?
    3. C(Y) increased to 7/8?
  1. What is the multiplier? Now is it similar to and how different from the velocity of circulation of money? the accelerator? the balanced budget multiplier?
    How would it be affected by

    1. a change in liquidity preference?
    2. a change in time preference
    3. a change in the elasticity of supply of money?
    4. a change in the propensity to consume?
    5. a fixed M and v?
  1. Describe carefully the mechanism by which an increase in M would increase S. How would this be affected if a lower i decreased the amount people wanted to save?

PART TWO

  1. Discuss these statements:
    “The main contribution of Keynes was to point out that full employment is not reached automatically because

    1. cannot become negative.
    2. workers have no way of reducing their real
    3. workers insist on a real wage greater than their marginal product.
    4. There is a liquidity trap.
  2. Describe carefully the meaning of the marginal efficiency of capital and the marginal efficiency of investment, and how they are related.
    1. in a growing economy
    2. in a declining economy
    3. in a stationary economy
    4. in a steady state of growth economy.
  3. “The rise and fall of the Phillips curve.”
    or
    “ The natural level of unemployment.”

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

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QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710 and 80
Mr. Lerner
Final Examination
Spring 1973

Answer Question 1 and three others.

  1. Branson Page 24 “the saving investment identity…as a natural derivative from the GNP identity”
    Branson Page 26 “The basic GNP identity:—

C + I + G + (X -M) = GNP = C + S + T + Rf,”

[where]

C=616; I=135; G=219; (X-M)=4; GNP = 974;
S = 149; T=208; Rf=1

    1. Show how the S, I identity can be derived from the GNP identity, spelling out any definitional differences in S or I.
    2. Give (and explain) another definition of S or I, as used by economists that makes I necessarily equal to S only in equilibrium.
  1. Compare the “classical” with the “keynesian” explanations of the automatic establishment of full employment on the assumption of wage and price flexibility.
  1. Explain how an increase in thrift (the desire to save) could (or could not) have the effect of (a) increasing investment, (b) decreasing investment, (c) increasing total income, (d) decreasing total income.
  1. Permanent Income, Life-cycle Consumption Hypothesis, Time Preference, Ratchet Effect, Wealth Effect, Pigou Effect — How are these six items related to the consumption function and to each other?
  1. Explain Branson’s distinction between the “real wage model” and the “money wage model”, and the purpose of the distinction.
  1. What do you consider the most distinctive feature of Leijonhufvud’s approach?
  1. Discuss.
    1. “With perfect wage and price flexibility there can be no problem of involuntary unemployment.”
    2. “A little wage and price flexibility (such as might be achieved in practice) could be worse than none.”
    3. “Too much wage and price flexibility could also cause trouble and not provide stable full employment.”
  1. Why is a rise in the price of foreign currency considered more of a crisis than a rise in the price of coffee or Mutual Fund Shares or real estate?

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

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1974

QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710, 80
Inflation, Employment and Growth
Seminar in Advanced Macroeconomic Theory
[1974]

Abba Lerner
Tues. 6:20-8:00 P.M.
Temp. 3, Room 2

An Integration of the theories of Employment, Inflation, Interest, Capital, Investment and Growth, and its lessons for the uses of Monetary Policy, Fiscal Policy and Price Policy. The Keynesian Revolution (Interpretations and Misinterpretations – General Theory or Special Case?) Pre-Keynesian, Keynesian and Post Keynesian Economics. International Complications and the Myth of International Money.

Basic Reading
Ackley Macroeconomics A
Breit & Ransom The Academic Scribblers B
Keynes The General Theory of Employment, etc. K
Leijonhufvud On Keynesian Economics, etc. L
Lerner Money (Encycl. Britt 1946 edition) M
Lerner Everybody’s Business EB
Lerner Flation F
Other Suggested Readings
Lekachman Keynes’ General Theory – Reports of Three Decades
Harrod Life of Keynes
Lerner The Economics of Employment

There will be one midterm test and a final Examination.

Week Date
1 Feb. 5 Outline — Classical to Keynes M, A 1-4, EB 10, F 1-5
2 12 Lincoln’s Birthday — no classes
3 19 Outline — Post Keynes A 5-8, EB 11, F 6-10
4 26 Say’s Law, Saving and Investment EB 13-14, F11-15
5 Mar 5 Monetary Policy A 9
6 12 Fiscal Policy, Consumption Function A10-12
7 19 The Complete Keynes Model A13-15
8 26 Inflation and Investment A16-17
9 Apr 2 Capital and Growth A18-19
10 9 No Class (Recess)
11 16 International Money F16-20
12 23 Keynesian Revolution? Dynamics L Parts I, II
13 30 Macromodels L Part III
14 May 7 Liquidity and Wealth L Part IV
15 14 Expectations, Illusions and Policies L Parts V, VI
16 21 Review M, A 20, EB, F

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 4 “Queens College of the City University of New York: Course outlines. 1971-77, n.d.”.

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QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Econ. 80—710
MIDTERM
Mr. Lerner
April 16, 1974

Answer question 1 and 3 other — 4 altogether.

  1. Suppose there is a decrease in the propensity to consume. Show how would this affect Employment, Prices and Investment
    1. if the amount of money is held constant
    2. if the rate of interest is held constant
      with wages and prices (1) perfectly flexible; (2) sticky downward
  1. Explain the relationship between the marginal efficiency of capital and the marginal efficiency of investment.
    How are these affected by an increase in
    1. the rate of interest?
    2. the optimism of investors?
    3. the wealth of the economy?
    4. the rate of time preference?
  1. I-S, L-M. Explain the nature of these curves, their use, and the stability condition they demonstrate.
  1. Show how the multiplier would be affected by an increase in
    1. the propensity to consume
    2. the marginal propensity to consume
    3. the marginal propensity to save
    4. the quantity of money
    5. the velocity of circulation
    6. liquidity preference
    7. government spending
    8. tax collection
    9. (7) and (8) together
  1. Why must saving (S) always be equal to investment (I)? What could be meant by the statement that an excess of S over I is deflationary?
  1. What are the features which distinguish the Keynesian from the pre-Keynesian and from the Post-Keynesian theories of the equilibrium level of employment? 

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

*  *  *  *  *  *  *  *  *  *  *  *  *  *

QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 80, 710
Inflation, Employment and Growth
Seminar in Advanced Macroeconomic Theory
Dr. A. Lerner

Final Examination
Spring 1974

Answer Question 1 and any three other questions — Four altogether

  1. Suppose there is an increase in thriftiness. Show the direct and the indirect effects on the Multiplier, Income, Employment, Prices and Investment
    1. with wages and prices perfectly flexible,
    2. with wages and prices sticky downward,
      in each case

      1. with the quantity of money held constant
      2. with the rate of interest held constant
  2. State and discuss the primary criticisms that Leijonhufvud makes of a) Keynes and b) the “Keynesians”.
  1. Compare the advantages and disadvantages of indexing
    1. when there is a steady rate of inflation and
    2. when there is a danger of inflation getting out of control.
  1. A well informed and intelligent observer remarks that “We are now suffering from an excess of saving over investment, which is deflationary”. He cannot really mean what he is saying because in the first place we are suffering from inflation rather than deflation and in the second place it is not possible for saving to be greater (or less) than investment. What could he be meaning to say?
  1. Marginal productivity of capital; Marginal productivity of investment; Marginal efficiency of capital; Marginal efficiency of investment.
    Under what conditions are any of these equal to the rate of interest? Explain carefully.
  1. How come America allowed the dollar to depreciate on the international money market? How is this different from national bankruptcy? Will this not result in the disorganization of international trade “beggar thy neighbor” competitive devaluations of freely floating currencies. How could it have been prevented and why was it not prevented?
  1. “The present very high interest rates show the determination of the government to stop the inflation. If this policy is persisted in it is bound to achieve this purpose since, as we all know, the fundamental cause of inflation is the increase in the quantity of money which the authorities have provided in the recent past in order to keep down interest rates”. Discuss the logic and the practicality of such a policy.
  1. How is the size of the multiplier likely to be affected by an increase in:
    1. the rate of interest?
    2. time preference?
    3. liquidity preference?
    4. government spending?
    5. the quantity of money?
    6. the population?
    7. the government budget?
    8. the use of charge accounts for consumer credit?

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

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1975

QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710, 80
Inflation, Employment and Growth
Seminar in Advanced Macroeconomic Theory
Abba Lerner
Spring 1975
Temp. 3, Room 2

An Integration of the theories of Employment, Inflation, Interest, Capital, Investment and Growth, and its lessons for the uses of Monetary Policy, Fiscal Policy and Price Policy. The Keynesian Revolution (Interpretations and Misinterpretations – General Theory or Special Case?) Pre-Keynesian, Keynesian and Post Keynesian Economics. International Complications and the Myth of International Money.

Basic Reading
Ackley Macroeconomics A
Keynes The General Theory of Employment, etc. K
Lerner Money (Encycl. Britt 1946 edition) M
Lerner Everybody’s Business EB
Lerner Flation F
Other Suggested Readings
Lekachman Keynes’ General Theory – Reports of Three Decades
Lerner The Economics of Employment

There will be one midterm test and a final Examination.

Week Date
1 Feb. 6 Outline — Classical to Keynes M, A 1-4, EB 10, F 1-5
2 13 Outline — Post Keynes A 5-8, EB 11, F 6-10
3 20 Say’s Law, Saving and Investment EB 13-14
4 27 Monetary Policy A 9
5 Mar 6 Fiscal Policy, Consumption Function A10-12
6 13 The Complete Keynes Model A13-15
7 20 No Class (Recess)
8 27 Midterm test
9 Apr 3 Inflationary Depression, the Wage Unit A16
10 10 Capital and Growth A17-18
11 17 International Money F16-20
12 24 Keynesian Revolution? Dynamics Lerner JEL Mar 1974
13 May 1 Liquidity and Wealth A 19
14 8 Expectations, Illusions and Policies A 20, F 11-15
15 15 Review

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 4 “Queens College of the City University of New York: Course outlines. 1971-77, n.d.”.

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Economics 710-80
Midterm Exam

Abba P. Lerner
March 20, 1975

Answer Question 1 and any two other questions (three altogether)

  1. If the propensity to consume (average and marginal) increases from 50% to 60% what would be the effect on the level of income?
    In your answer consider the six (6) possible combinations of the following conditions:
    The mpI (marginal propensity to invest, i.e. the increase in investment due to an increase in income as a percentage of the increase in income) is (a) 40% (b) 30%
    The elasticity of supply of money plus the elasticity of demand for money is (i) infinite (ii) unitary (iii) zero
  1. Discuss your views and those of Keynes, Ackley, and Lerner on “Involuntary unemployment is basically due to the inability of workers to reduce their real wage”.
  1. Which (if any) of [the following] statements are true? Why do you think so? Indicate any connections between them.
    1. “The more steeply any average (A) is rising (falling) the more will the corresponding marginal (M) be above (below) it, i.e. the greater will be M minus A”.
    2. “The short run mpC (marginal propensity to consume) is less than the short run apC (average propensity to consume)”.
    3. “The long run mpC is equal to the long run apC”.
    4. “For a temporary increase in income mpC minus apC is less than for a permanent increase in income”.
  1. What is Say’s Law? Discuss its logical base, its empirical validity and its practical usefulness.
  1. Income can be defined more widely or more narrowly. Distinguish between the different definitions and indicate how the different definitions could better serve different purposes.

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

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QUEENS COLLEGE
DEPARTMENT OF ECONOMICS

Economics 710/80
Dr. A. Lerner
FINAL EXAMINATION
May 22, 1975 (Thursday)

Temp 3 Room 2

Answer Questions 1 and any two others — 3 altogether

  1. Suppose consumption increases from 70% of GNP to 80% and the marginal propensity to consume increases from 50% to 75%. What could be the effect on the GNP if the elasticity of demand for money plus the elasticity of supply of money (with respect to changes in the rate of interest) is (a) infinite (b) zero (c) one, and the marginal propensity to invest (with respect to GNP) is (and remains) (i) 20% (ii) 25% (This makes six combinations).
  1. Is an increase in the national debt beneficial, harmful or neutral for the welfare of (a) the present generation (b) future generations? State and examine the arguments for the different views.
  1. “Involuntary unemployment is due to the inability of workers to reduce their real wage”. “Involuntary unemployment is due to an unsatisfied demand for a larger stock of money”. Discuss.
  1. “To succeed in winning the battle against stagflation we must (a) tighten our belts (b) use the tax rebate to buy more automobiles and (c) make more money available for mortgages for housing”. Discuss.
  1. “Say’s Law is invalid but useful while the Pigou Effect is valid but useless.” Does this make any sense?
  1. Does the rate of interest determine the marginal efficiency of capital? Or Vice versa? Or what?

Source: U. S. Library of Congress, Manuscript Division. Papers of Abba P. Lerner, Box 17, Folder 5 “Queens College of the City University of New York: Examinations”.

Image Source: National Academy of Sciences. 1994. Biographical Memoirs: Volume 64, p.208.  Washington, DC: The National Academies Press.

 

Categories
Chicago Exam Questions Theory

Chicago. First quarter price theory exams. Rees, 1960

Happy to add another round of first quarter price theory exams from the University of Chicago to the collection. Always nice to have a picture from the early professional years of the economists featured here. Distinguished old farts were once rising stars after all. (A general wisecrack made with the qualification, “present company excluded”.)

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Posted earlier

Reading list and exams from the Autumn quarter of 1962.

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Economics 300
Mr. Albert Rees

Midterm Examination
Autumn 1960

  1. (16 points) State whether each of the following statements about the U. S. economy is true, false, or uncertain, and explain your answers briefly.
    1. Consumers decide what will be produced.
    2. All consumers participate equally in determining what will be produced.
    3. The government influences the composition of output in the private consumer goods sector.
    4. The government determines the level of investment for the economy as a whole.
  1. (10 points) Comment briefly on the following statement:
    “When equilibrium prices in competitive markets are disturbed, they tend to be re-established. Thus the first effect of an increased supply of eggs is to lower the price. At this lower price, consumption is increased, and the increase in demand tends to drive the price back up again.”
  2. (16 points) Increased costs cause manufacturers to reduce the size of 5 cent chocolate bars from 2-1/2 ounces to 2 ounces. Because the bars are smaller, people eat more of them and consumption rises from 10, 000 bars a week to 11,000.
    1. Can these events be shown on an ordinary supply and demand diagram? If so, show them. If not, explain why.
    2. Can the elasticity of demand for chocolate be computed? If so, compute it. If not, explain.
  1. (24 Points) The following table gives hypothetical prices of pork and beef per pound in two years, and quantities consumed in a certain town.

 Price per pound Pounds consumed
1959 1960 1959

1960

Pork

 40 cents 50 cents 1000 800
Beef 60 cents 60 cents 1000

1200
    1. Compute the elasticity of demand for pork and the cross-elasticity of demand for beef in terms of the price of pork.
    2. Compute the Laspeyres price index for the price of meat from 1959 to 1960 (assuming that pork and beef are the only kinds of meat).
    3. Draw an indifference map for pork and beef for a typical consumer and illustrate the changes shown in the table on his indifference map. Derive two points on his demand curve for pork.
    4. Assume that the consumer’s money income is increased by an amount equal to his original income times the Laspeyres price index computed in (b). Demonstrate that he has been overcompensated for the price rise. Under what condition if any would this increase in income fail to overcompensate him?
  2. (16 points) Jones lives in a rented house for which he pays $150 a month. He has the opportunity of buying an identical house for $25,000, of which $15,000 will be paid in cash and $10,000 can be borrowed on a mortgage. He has figured that his monthly expenses would be $100 if he bought: $50 for interest on the mortgage, $20 for local taxes, and $30 for maintenance and depreciation. His income tax and expenses for fuel and utilities will not be affected by the purchase. He argues that it will cost him less to live if he buy the house; his wife argues that it will not.
    1. Under what conditions is Jones right? Under what conditions is Mrs. Jones right?
    2. Is there any divergence between the “right answer” to this problem from the private standpoint of the Jones family and from the standpoint of society? Explain.
  1. (18 points) The GJS corporation, manufacturers of gadgets, have determined that for every 10 per cent increase in the capacity of a gadget factory, minimum short-run average total cost falls by 1 per cent throughout the relevant range of capacities.
    1. What can you say about the production function for gadgets over the relevant range?
    2. Suppose that the company hires two factors of production, labor and capital, and pays each its marginal product. Will anything be left over for the owners of the company who contribute no services? Explain.
    3. Suppose that the company wants to build a plant to produce 10,000 gadget per week. What can you say about the size of the plant that will produce these most efficiently?

Economics 300
Mr. Rees
Fall. 1960

Final Examination
December 14, 1960

  1. (21 points) Show each of the following events on an indifference map:
    1. The change in the consumption of margarine following an increase in income (axes: butter and margarine. Assume that the income elasticity of demand is positive for butter and negative for margarine.)
    2. The change in the consumption of bread following a rise in its price. (axes: bread and all other commodities.) Identify the income and substitution effects of the price change.
    3. Do part (b) over using Friedman’s “Marshallian demand curve” concept and explain the difference between the diagrams for (b) and (c).
  2. (19 points) In the United States, about one-fifth to one-fourth of all income is property income. State briefly (a) the advantages of having private income from property in our economy (b) the costs or disadvantages. You may judge these according to any values you care to use, making the values as explicit as possible.
  3. (20 points) In a certain isolated area there are 50 farms of each of two types, A farms and B farms (100 farms in all). Within each type, all farms are identical. All farms are worked by identical workers. The marginal product schedules of one farm of each type are given below, in bushels of wheat per year.

 A Farm

B Farm

No. of workers
1 100

95

2

 90 84
3 80

73

4

 70 62
5 60

51
  1. If there are 260 workers in the area, how many will be employed on each kind of farm? What is the total product of each kind of farm? The rent of each kind of farm? The wages of workers on each type of farm in bushels per year? (Assume that farmers compete freely for labor, and labor can move within the area.)
  2. By means of an irrigation project, the owners of twenty B farms transform them into A farms. Recompute the answers to (a), counting the transformed farms as A farms. Who gained and who lost from the project, and why?
    1. (20 points) By means of appropriate diagrams and/or explanations, show the short-run effect of each of the following taxes on the output and profits of a monopolist.
    2. An excise tax of 10 cents per unit of product.
    3. An excise tax of 10 percent of the price of the product.
    4. A corporate profit tax equal to 50 percent of net profits.
  1. (20 points) The Edgeworth Box Company is the only employer in the town of Yarmouth. Its supply schedule of labor is given by W = 40 + 1/4 q, where W is the wage in cents per hour and q is the number of manhours supplied per week. The company sells boxes in a competitive market. The value of the marginal product of labor is given by
    V = 100 – 1/2 q for values of q greater than zero.
  2. How many man-hours of labor will the company employ, and at what wage?
  3. Show diagramatically for part (a) first, the wage bill and second, the sum of monopoly profits and the return to factors of production other than labor.
  4. What will be the effect on employment of a legal minimum wage of 60 cents an hour? of 80 cents an hour?

This problem may be solved algebraically or graphically. The following table gives numerically some points on the schedules whose equations are given above:

Supply

Marginal Product

q (Man-hours)

 W (cents) q (man-hours) W (cents)
1 40.25 1

99.5

2

 40.50 2 99.0
3 40.75 3

98.5

4

 41.00 4 98.0
etc.

etc.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Albert Rees Papers, Box 1, Folder “Economics 300”.

Image Source: University of Chicago Photographic Archive, apf1-07002, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library. Colorized by Economics in the Rear-View Mirror.

Categories
Agricultural Economics Exam Questions Harvard Suggested Reading Syllabus

Harvard. Syllabus, readings, exams for agricultural economics. Galbraith, 1938-39

John Kenneth Galbraith, not quite 25 years of age

The first association made in one’s mind upon hearing the name John Kenneth Galbraith is certainly not “agricultural economics”, but that was the field in which his academic career began and indeed it was what got his foot into the door at Harvard. In his papers at the John F. Kennedy Presidential Library one can find some material for his courses that is not to be found in the Harvard archives, such as the course outline and reading assignments for his year-long course taught in 1938-39 to undergraduates and graduate students, “Economics of Agriculture”. 

Economics in the Rear-View Mirror tops off Galbraith’s syllabus and reading list with enrollment figures and semester exams transcribed from material in the Harvard Archives.

_____________________________

Course Enrollment

[Economics] 72. Dr. Galbraith—Economics of Agriculture.

Total 41: 2 Graduates, 33 Seniors, 5 Juniors, 1 Other.

Source: Annual Report of the President of Harvard College 1938-1939, p. 98.

_____________________________

Outline of the Course.
Three objectives.

  1. Some idea of the agriculture of the United States and Western Europe—that which one is likely to encounter. Two aspects:
    1. Type of production
    2. Kind of agricultural organization. Meaning.
  2. An understanding of the economics of the agricultural industry.
    Previous experience with economic theory
    Parts of a course such as this to see if it can be clothed with factual material and made useful.
    Peculiar advantages of agriculture.
  3. Building on the previous two stages, we turn to agricultural policy. What is agricultural policy? The farm problem.
    —we examine the factors underlying economic difficulties of agriculture in recent years, the causes of distress. The way the United States has attempted to meet is farm problem and the various policies which may be contemplated in the future.
    —we will attempt to compare this with the policy of other countries.

*  *  *  *  *  *  *  *  *  *  *  *

Economics 71
(First half year)
Reading List

Persia Campbell, American Agricultural Policy, pp. 1-55.

President’s Report on Farm Tenancy in the U.S., pp. 35-49, 3-20. [cf. https://hdl.handle.net/2027/coo.31924074241344 ]

C.O. Brannen. Relation of Land Tenure to Plantation Organization. U.S.D.A. Bulletin 1269, 1924-25, p. 3, 8-38, 60-67.

The Future of the Great Plains. Report of the Great Plains Committee, pp. 1-89.

Chamberlin, Theory of Monopolistic Competition. Pp. 1-116.

Dennison and Galbraith. Modern Competition and Business Policy, pp. 1 to 109.

Garver and Hanson. Principles of Economics, Chapter V.

Black and Black. Production Organization, pp. 109-145, 255-260 inc.

Cassels, J. M. On the Law of Variable Proportions in Explorations in Economics, p. 223.

Galbraith and Black, Maintenance of Agricultural Production, Journal of Political Economy, June, 1938.

ECONOMICS 71
Syllabus – 1938-39

Chapter I.
A General Survey of Agricultural Production

    1. The agriculture of the United States. The livestock and crop production of the different regions of the United States. The classification of American agriculture by “type-of-farming”. A review of the type-of-farming map of the United States.
    2. The agricultural systems of the United States. The family farm. Ownership und tenancy. Part-time agriculture in the East. Large-scale and corporation forms in the Great Plains and West. Plantation and cropper agriculture in the South. Retrograde and decayed agricultural production in in the southern Appalachians.[Hand-written marks on the carbon copy indicate that (c) and (d) were not covered.]
    3. English agriculture. Character of agricultural production in England. The large land-owners and tenant farming. Independent ownership in England.
    4. Western Europe and the Danube Basin. (i) a survey of the agricultural map and agricultural production of Western Europe. (ii) The agricultural systems of the Continent. Peasant agriculture and types of peasant culture and organization. The distinction between peasant and farmer. Estate or Junker agriculture.

Chapter II
The Competitive Structure of Agricultural Enterprise as a Whole

    1. Monopoly, monopolistic — and pure competition. Review of the theoretical categories of competitive organization. Comparison of competitive organization in agriculture with that in industry. Comparisons of competitive structure in agricultural production with that in the supply of agricultural production goods.
    2. the significance of “pure” competition in agriculture

— in relation to agricultural price behavior
— in relation to behavior of agricultural production
— in relation to the variability of agricultural income.

Chapter III
The Organization of the Individual Farm Enterprise

    1. Theoretical differences between the adjustment of industry and agriculture to economic change. the significance of the coincidence of marginal with average revenue in agriculture.
    2. The combination of the factors of production. Diminishing returns. The highest profit combination in agriculture.
    3. Practical considerations in achieving optimum returns. The combination of enterprises. Budgeting technique. the effect of the period of production and the problem of price forecasting.

*  *  *  *  *  *  *  *  *  *  *  *

Economics 71
Outline and Reading List
Second Half-Year, 1938-39

Chapter IV.
The Financing of Agriculture

    1. the nature of the financial requirements of the farmer. Land purchase credit; credit for durable capital; production credit.
    2. Recent trends in the development of agricultural credit institutions. The transition from private to public institutions.
    3. The riddle of public credit policy.

Readings:

Farm Credit Administration. Annual Report 1937. Pp. 15-83.

Galbraith. The Farmer’s Banking System; Four Years of F.C.A. Operations. Harvard Business Review. Spring 1937.

Galbraith. The Federal Land Banks and Agricultural Stability. Journal of Farm Economics, February, 1937.

Chapter V.
Agricultural Land

    1. The development of American land policy; the transition from free land to private ownership and full utilization.
    2. The problem of optimum utilization. The margin of desirable use. The reasons for sub-marginal utilization. The alternative uses of sub-marginal farm lands and the techniques for controlling land use.
    3. The economic aspects of the erosion problem.

Readings:

Hibbard, B. H. A History of the Public Land Policy, Chapters I, XIII, XVI, XVII, XVIII, XXVII, XXVIII.

National Resources Board. Part II. Report of the Land Planning Committee. Pp. 108-134, 154-202. A general rather than a detailed examination of this report is expected. Attention is called to other sections of the report.

U.S. Department of Agriculture. To Hold This Soil. Misc. Publication 321. 1938. Copies may be obtained from U.S.D.A, or Congressman.

Chapter VI
Agricultural Labor.

    1. General character of agricultural labor force. Family labor, the individual worker, seasonal and spring labor. Trade union organization in agriculture. Ownership aspirations of the agricultural laborer and the so-called agricultural ladder.

Readings:

Social Problems in Agriculture. I.L.O., 1938. Pp. 23-38, 40-54, 57-71, 72-97.

[International Labour Office. Studies and Reports, Series K (Agriculture) Social Problems in Agriculture. Record of the Permanent Agricultural Committee of the I.L.O. (7-15 February 1938). Geneva]

Chapter VII
The Agricultural Policy of the United States

    1. Proposal and legislation for farm relief during the 1920’s.
    2. The Agricultural Adjustment Administration and the farm program of the New Deal.

Readings:

Nourse, Davise, Black. Three Years of the Agricultural Adjustment, pp. 1-245.

Report of the Secretary of Agriculture 1938. pp. 1-68. This may be obtained from Office of Information, U.S.D.A. or a Congressman.

[There is a bracket for Chapter VIII hand-marked on Galbraith’s personal copy, from this and the final exam it appears that these topics were likely not covered in the course.]

Chapter VIII.
Comparative Aspects of Foreign Agricultural Policy

    1. The agricultural policy of Great Britain.
    2. The agricultural policies of Sweden and Denmark.
    3. Autarchial agricultural policy in Germany and Italy.
    4. The determinants of agricultural policy in review.

Readings:

Bonow, M. Agricultural Policy: Lessons from Sweden.

Denmark. Agriculture. The Agricultural Council. Look over and cf. particularly pp. 9-26, 287-316.

Marquis Child. Farmer-Labor Relations in Scandinavia. Yale Review, Autumn, 1938.

Karl T. Schmidt. The Plough and the Sword, pp. 1-175.

R. A. Brady. Spirit and Structure of German Fascism. Pp. 213-291.

_____________________________

HARVARD UNIVERSITY
ECONOMICS 71
Mid-year Examination
1938-39.

  1. (Reading period material.) Write for about three-quarters of an hour on one of the following topics:
    How the United States government has disposed of its land.
    Proposed measures for farm relief in the 1920’s.
    The objectives and methods of the Agricultural Adjustment Administration 1933-36.
  2. What do you understand by the phrase “a system of agriculture”? With reference to your statement, outline the major systems of agriculture in the United States.
  3. Discuss the competitive organization of the agricultural industry and indicate the economic possibilities and limitations upon collective action by farmers for increasing their income.
    Cite relevant examples where possible.
  4. What difficulties would you expect to encounter in endeavoring to determine the cost of producing milk in New England assuming that farmers are ready to furnish you all available data?
  5. How does agricultural output behavior differ from that of industry during depression and why? Enter fully upon the theoretical aspects of this question and discuss critically.

Source: Harvard University Archives. Bound volume Mid-Year Examinations—1939 in Harvard University, Mid-year examinations 1852-1943. Box 13.

_____________________________

HARVARD UNIVERSITY
ECONOMICS 71
Final Examination
1938-39.

  1. (Reading period material.) Write for about three-quarters of an hour on the application of the ideas of either Henry George or Thorstein Veblen to the problems of present day agriculture.
  2. “The agricultural laborer is truly the forgotten man. Unorganized, isolated, ill-paid and over-worked his plight is not even sufficiently well-known so that it bothers the nation’s conscience.”
    Discuss fully and critically
  3. Discuss and contrast the effects of (a) a too generous and (b) a too niggardly supply of farm mortgage credit under various conditions of agricultural prosperity and depression. Do not present an historical material that is not relevant to your answer.
  4. Explain as you see it, the relationship between private ownership of land and the problems of conservation and soil erosion.
  5. Is production control by the Federal government necessary to the well-being of American agriculture? Justify your answer fully.

Source: Harvard University Archives. Papers Printed for Final Examinations [in] History, History of Religions, … , Economics, … , Military Science, Naval Science (June, 1939) in Harvard University Final Examinations, 1853-2001. Box 4.

Image Source: Photo of John Kenneth Galbraith attached to his declaration of intention to become a citizen of the United States submitted on June 16, 1933 in Oakland California.
Fun fact: JKG weighed in at 180 pounds (81.65 kg) with a height of 6 ft 8 inches (2 m, 3 cm).  BMI = 19.8.

Categories
Business Cycles Distribution Economic History Exam Questions History of Economics Industrial Organization International Economics Johns Hopkins Labor Money and Banking Public Finance Public Utilities Statistics Theory

Johns Hopkins. General Written Exam for Economics PhD. 1956

 

One is struck by the relative weight of the history of economics in this four part (12 hours total) general examination for the PhD degree at Johns Hopkins in 1956. Also interesting to note just how many different areas are touched upon. Plenty of choice, but no place to hide.

________________________

Other General Exams from Johns Hopkins

________________________

GENERAL WRITTEN EXAMINATION FOR THE PH.D DEGREE
DEPARTMENT OF POLITICAL ECONOMY

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

PART I
June 4, 1956, 9-12 a.m.

Answer two questions, one from each group.

Group I.
  1. Write an essay on the theory of capital. It should include a discussion of the place of capital theory in economic analysis: for what purposes, if any, we need such a theory, Do not omit theories or issues which were important in the history of doctrines, even if you should regard them as irrelevant for modern analysis.
  2. Discuss and compare the capital theories of Böhm-Bawerk, Wicksell, and Hayek.
  3. Write an essay on the theory of income distribution. Organize it carefully, as if it were designed for an article in the Encyclopedia of the Social Sciences. Include discussions of alternative theories such as imputation theories, residual theories, surplus value theories, etc.
Group II.
  1. The following statements attempt to show that marginal productivity theory is inconsistent with factual observation. Accepting the stated facts as given, discuss whether they call for the rejection or major modification of the theory. If so, how? If not, why not?
    1. “In the most important industries in the United States wage rates are set by collective bargaining and are largely determined by the bargaining strength of the parties. Marginal productivity of labor is neither calculated nor mentioned in the process.”
    2. “In many industries competition among employers for workers is so limited that most firms are able to pay less than the marginal productivity of labor.”
    3. “Workers in some trades — say, carpenters or bricklayers — work essentially the same way as their predecessors did fifty years ago; yet their real wages have increased greatly, probably not less than in occupations where productivity has improved considerably over the years.”
  2. The determination of first-class and second-class passenger fares for transatlantic ocean transportation involves problems of (a) joint or related cost, (b) related demand, and (c) discriminatory pricing. Discuss first in what ways these three phenomena are involved here; then formulate a research project to obtain the factual information required for an evaluation of the cost relationships and demand relationships prevailing in the case of two-class passenger ships; and finally state the criteria for judging whether the actual rate differential implies conscious discrimination in favor of first-class passengers, conscious discrimination against first-class passengers, wrong calculation and faulty reasoning on the part of the shipping lines, or any other reason which you may propose.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

PART II
June 4, 1956, 2-5 p.m.

Answer three questions, at least one from each group.

Group I.
  1. There is a running debate on the question whether trade unions are labor monopolies. This debate obviously turns on the meaning of monopoly and on what effects union have had on their members’ wages, output, and conditions of work. Give both sides of the argument.
  2. Write an essay on the demand for labor.
  3. Write down everything you know about the incidence of unemployment among various classes of workers and about the fluctuations of unemployment over time. Discuss some of the problems of developing a workable concept of unemployment. Indicate whether the statistical behavior of unemployment throws any light on its causation.
Group II.
  1. What is a “public utility”? According to accepted regulatory principles, how are the “proper” net earnings of a utility company determined? And, finally, what factors are considered in setting an “appropriate” rate structure?
  2. What is the major purpose of the Sherman Anti-Trust Act of 1890? What are some of the more significant problems in determining what constitutes “restraint of trade”? What tests would you apply? Why?
  3. Analyze the economic effects of a corporate income tax. Be as comprehensive as you can.
  4. What are flexible agricultural price supports? Explain how they are determined and applied. Evaluate their use in the light of reasonable alternatives.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

PART III
June 5, 1956, 9-12 a.m.

Answer three questions, one from each group.

Group I.
  1. Describe briefly Schumpeter’s theory of economic development, and comment upon the possibility of testing it empirically.
  2. Describe briefly Keynes’ general theory of employment, interest and money; state its assumptions, structure, and conclusions; and evaluate it critically in the light of more recent theoretical and empirical findings.
Group II.
  1. What characteristics of economic cycles would you consider important in a statistical study of business cycles?
  2. In the study of long-term trends, what criteria would you use in constructing index numbers of production?
  3. What measures of economic growth of nations would you us? Consider carefully the various characteristics that you would deem indispensable in measurements of this sort.
Group III.
  1. Give a brief definition, explanation and illustration for each of the following:
    1. variance;
    2. confidence interval;
    3. coefficient of regression;
    4. coefficient of correlation;
    5. coefficient of determination;
    6. regression line.

[Note: Indicate where you have confined yourself to simple, linear correlation.]

  1. Write an essay on statistical inference by means of the following three techniques:
    1. chi square;
    2. analysis of variance;
    3. multiple regression.

Indicate the types of problem in which they are used, and how each type of problem is handled.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

PART IV
June 5, 1956, 2-5 p.m.

Answer four questions, one from each group.

Group I.
  1. Political arithmetic is a term that is applied to certain writings that appeared from roughly 1675 to 1800. What gave rise to such writings? What were the contributions of the different members of the “group”? Why should Political Arithmetic be given a terminal date?
  2. Discuss Quesnay’s Tableau Économique, Do you see in it anything of significance for the subsequent development of economic theory?
  3. Present arguments for the contention that J. B. Say was far more than “a mere disciple of Adam Smith”.
Group II.
  1. Discuss the relations between the English economic literature of the first half of the 19th century and the events, conditions, and general ideas of that time.
  2. Select three episodes in American economic history, and use your knowledge of economic theory to explain them.
Group III.
  1. Analyze the economic effects of a large Federal debt. Be as comprehensive as you can.
  2. At one time or another each of the following has been proposed as the proper objective or goal of monetary policy: (1) The stabilization of the quantity of money; (2) The maintenance of a constant level of prices; (3) The maintenance of full employment.
    Explain for each policy objective (a) what it means, that is, exactly what in “operational” terms might be maintained or stabilized; (b) how the objective could be achieved, that is, what techniques could be used to achieve it; and (a) the difficulties with or objections to the proposal.
  3. Irving Fisher and others have proposed that all bank be required to hold 100% reserves against their deposits. This was designed to prevent bank failures and, more important, to eliminate the perverse tendency of money to contract in recessions and expand in booms.
    Explain whether the proposal would have the effects claimed for it, and if so, why, and discuss what other effects it might have.
Group IV.
  1. Discuss the “law of comparative advantage” in international trade.
  2. Discuss “currency convertibility”.
  3. Discuss the “transfer problem”.
  4. Discuss the “optimum tariff”.
  5. Discuss the “foreign-trade multiplier”.
  6. Discuss alternative concepts of the “terms of trade”.
  7. Discuss the “effects of devaluation upon the balance of trade”.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Source: Johns Hopkins University. Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy Series 5/6.  Box No. 6/1. Folder: “Comprehensive Exams for Ph.D. in Political Economy, 1947-1965”.

Image Source: Fritz Machlup in an economics seminar. Evsey Domar visible sitting third from the speaker on his right hand side. Johns Hopkins University Yearbook, Hullabaloo 1956, p. 15.