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Exam Questions Fields M.I.T.

M.I.T. General exam questions, fiscal economics, 1963

 

The following general exam in fiscal economics was found in Evsey Domar’s papers at Duke University’s Economists’ Papers Archive. Two students apparently took this examination and were graded by Domar:  Michael Repplier Dohan (MIT Ph.D., 1969) and Silva (unable to determine first name).

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September 23, 1963

GENERAL EXAMINATION IN FISCAL ECONOMICS
THREE HOURS

Please answer THREE QUESTIONS, ONE from each part. Use a separate examination book for each question.

Part I.

  1. Write an essay on the subject of “The Effect of Built-In Stabilizers on the Growth and Fluctuations of the American Economy.”
    Explain what they are and how they work.
  2. State the economic objectives which the American Federal Government, in your opinion, should pursue at the present time and explain how well (or badly) the details of the proposed tax reduction; indicate, however, what kind of reductions you have in mind).

 

Part II.

  1. Explain as fully as you can the economic effects of a, say, 50 per cent income tax imposed on (a) corporations, and (b) all businesses. Indicate the positions taken by the authorities in the field, your own position, and methods of testing them.
  2. Abba Lerner has suggested that the best tax would be a kind of a poll tax imposed on each individual not in relation to his actual income but to his potential income (what he could earn) as estimated by the tax authorities.
    Leaving the practical aspects of this proposal aside, explain the following:

    1. What objectives was Lerner trying to accomplish by means of this unusual tax?
    2. What does this proposal tell you about Lerner’s general economic philosophy?
    3. What defects in our existing (federal) tax structure was Lerner trying to eliminate by this proposal?
    4. How would you deal with the defects indicated in (c)? Be specific.

 

Part III.

  1. Explain as fully as you can the objectives to be pursued and the problems likely to be encountered by recurrent deficit financing (an excess of expenditures over receipts) if practiced by the following organizations:
    1. The American Federal Government
    2. The national government of India or of some other underdeveloped country
    3. An American state (or local) government
    4. American business as a whole
    5. An American business corporation.
  2. Amoz Morag, an Israeli economist, once said that our whole theory of public finance, having been developed mostly in England and in the United States, is based on certain economic philosophy natural to these countries but not to the underdeveloped ones. For the latter, a very different approach to public finance is required, frequently leading to conclusions and methods diametrically opposed to the usually accepted ones.
    Comment fully.

 

 

Source:  Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Evsey Domar Papers, Box 16, Folder “Ph.D. examinations, Fiscal Economics”.

Image Source:  Evsey Domar from the MIT Museum website.