There does appear to be a pattern at M.I.T. of having every second year a general examination for the subject of business fluctuations in this collection of exams for the period 1950-56. It is also possible that Paul Samuelson only served on the examination committee every-other year. Still we can be happy to have a series of four general exams on this topic for MIT covering the first half of the 1950s. In a previous post, Economics in the Rear-view Mirror transcribed Domar’s stash of general exams in macro that covers the 1960s.
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James Hanson
GENERAL EXAMINATION
in
ECONOMIC FLUCTUATIONS AND POLICY
October 6, 1950
Answer question 1, and three of the remaining questions.
- (1 hour) What areas in the analysis of the determination of the level of real income are least satisfactory at the present time? Criticize in detail the shortcomings of one of these areas.
- What are some of the statistical and conceptual difficulties met in distinguishing between gross and net national product? For what purposes is this distinction important?
- Outline a positive role for the Federal Reserve authorities in shaping the aggregate level of economic activity. Discuss and appraise the difficulties the authorities will face.
- What contributions to the theory of the business cycle and economic growth are suggested by the study of the relationships between the level of income and the stock of capital?
- Governmental expenditures on national defense are going to rise to a new level, $20 billion per year higher than the existing one. This level will be maintained for three years and then will fall back to the present one. What fiscal policies would you recommend to cope with this situation? Appraise the feasibility of your program and compare it with alternative economic policies.
- What do you conceive to be the role of forecasting in stabilization policy?
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GENERAL EXAMINATION IN
BUSINESS FLUCTUATIONS
9:00-12:00 n.
Friday
May 9, 1952
ANSWER ALL QUESTIONS
(1 hour)
- (1 hour) Discuss the use and limitations of national-income data in planning alternative mobilization policies.
- (½ hour) Discuss and appraise the effectiveness, both theoretic and practical, of automatic fiscal-monetary devices. In your answer give examples from the economic literature.
- (½ hour) “We solemnly explain that excise taxes are deflationary because they raise prices, that is, because they are inflationary.” Comment critically on the above quotation.
- (½ hour) Appraise the effect of the Wage Stabilization Board’s Steel-wage recommendations on the level of real and money national income.
- (½ hour) Indicate the contribution of two of the following to the understanding of economic fluctuations.
Wicksell; Kuznets; Mitchell; Metzler; Klein; Lange_________________
GENERAL EXAMINATION IN ECONOMIC FLUCTUATIONS
May 19, 1954
Answer any four questions.
- It has been said that the Keynesian system of income analysis contains no explicit supply considerations. Appraise this criticism, with particular reference to Keynes as well as later writers.
- How would you go about testing the empirical validity of the Colin Clark hypothesis that inflation results whenever the level of taxation and expenditure exceed 25 percent of “national income”?
- “Obviously, under-employment equilibrium with flexible wages is impossible.” Discuss.
- What are the relevant economic considerations in choosing between tighter money, higher personal-income taxes, or lower government expenditures as a means of closing an inflationary gap.
- Some writers claim that the business cycle of the interwar and earlier periods has disappeared as an economic phenomenon. What structural changes in the U.S. economy of the last 15 years would account for their attitude? Do you agree or disagree with the conclusion of these writers?
- “There is a cyclical fluctuation in business-cycle theories. Earlier theories embodied a theory of cumulative movement and a theory of turning points. Later work showed that a single set of relationships could explain both and now there is a trend back toward the earlier explanations.” Discuss, citing specific authors.
- Will an increase in the desire of households to save change the rate of interest? Explain.
- “For both political and economic reasons fiscal policy is more successful in a depression, whereas monetary policy is superior in a boom.” In discussing this statement draw on your knowledge of the operation of monetary and fiscal policy in the United States over the past three decades.
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GENERAL EXAMINATION IN BUSINESS FLUCTUATIONS
September 12, 1956
Answer any five questions.
- “There is a cyclical fluctuation in business-cycle theories. Earlier theories embodied a theory of cumulative movement and a theory of turning points. Later work showed that a single set of relationships could explain both; and now there is a trend back toward the earlier explanations.” Discuss, citing specific authors.
- Discuss briefly the issues for national income accounting raised by two or more of the following:
- gross and net national product
- government activities
- desire for welfare interpretations
- Summarize briefly our knowledge of capitalism’s historical business cycles. What views does this experience lead you to?
- “Economic forecasting is both an art and a science.” “Economic forecasting is neither an art nor a science.” Appraise the current status of economic forecasting.
- What are the important policy problems of economic stabilization? Be comprehensive and specific.
- What contributions to the theory of the business cycle and economic growth are suggested by the study of the relationships between the level of income and the stock of capital?
- “We solemnly explain that excise taxes are deflationary because they raise prices, that is, because they are inflationary.” Comment critically on the above quotation.
Source: Duke University. David M. Rubenstein Rare Book & Manuscripts Library. Economists’ Papers Archive. Paul Samuelson Papers, Box 33, Folder “Teaching Exams 1952, 1956”
Image Source: M.I.T., Technique 1950.