Final Exam Questions -- Economics 4131, Spring 2006
1. Explain how the gold standard operated in the classical period (1870-1914). What were
the advantages and disadvantages? Some say the gold standard sacrificed internal balance
to external balance. How? What were the “rules of the game” and what would happen
when they were violated? What would happen when the demand for monetary gold rose
faster than the supply, and why was this a problem?
2. Explain the functioning of the Bretton Woods currency arrangement. Why was it
designed as it was? What strains appeared over time, and what factors led to its collapse?
What was “Triffin’s dilemma”?
3. Use the national income accounting identity to explain the phenomenon of “twin
deficits.” Explain how the surge in the U.S. fiscal deficit has spilled into a need for
international finance. What are the current sources of this finance? Describe the dilemma
facing the Asian central banks. Describe the “hard landing” scenario. What needs to be
done to ensure a “soft landing”?
4. Explain step-by-step why and how a central bank might w...
This deficit has to do with having responsible leader who are willing to increase awareness and make beneficial changes in the nation. In my opinion, the federal debt is a serious threat to the US that must be politically address whenever possible. I believe that the candidates of the 2016 presidential election should make this issue one of the top priorities to discuss and to dictate a considerable amount of work to fix it. That is because the worse the federal debt is, the worse the future would be to the nation. Also, voters must be well educated about this issue in order to shape their decision in voting for the candidate that seems most powerful and confident about this problem. Solving this problem may be difficult and would take time and so much effort. Therefore, the changes and solution must be on both a national and individual levels as
2. This exam consists of 60 multiple-choice questions. Select the BEST answer and mark the appropriate
December 1st, 1958 tragedy comes to Chicago, the catholic school Our Lady of Angels is a blase a fire has started in the basement of the north wing of the school at the bottom of the stairwell and is roaring through the north wing in a matter of minuets despite the best efforts of the Chicago fire department the north wing is nearly a total loss resulting in the death of 90 people died in the blaze and 5 more were critically injured resulting in deaths. Through my research I have sought to find the role that the construction of the building has played in the precipitation of this tragedy.
Many argue that Reagan “enacted irresponsible tax giveaways for the rich…[starving] the federal government of revenue [which] led to unprecedented deficits.” There is no doubt that “today’s budget deficits [can] impoverish our descendants.”1
A large increase in government debt occurred during Ronald Reagan’s presidency in the 1980’s. Ronald Reagan was dedicated to decreasing taxes a...
The US has been in and out of debt countless times throughout history, going as far back as the Civil War. However, debt did not become a truly relevant problem until much later, in the 1980s (Budget Deficits). Up to that point, large budget deficits were generally only allowed during wartime, but this pattern ended after the Great Depression. Roosevelt’s New Deal meant that the government spent much more than it previously did, even after the economy improved (Budget De...
The national debt is usually a frightening topic citizens of any country, however, in the United States, twenty trillion dollars of national debt is one of the major fears of the economy. Along with this fear comes every politician claiming to be the person to lower this astronomical debt to ease concerns in the modern American economy. In Hamilton’s Blessing, John Steele Gordon tries to alleviate these concerns by showing a plethora of benefits and good the debt has been able to do throughout the history of the United States. The central premise of the book and the main guideline for John Steele Gordon’s thinking is that the debt was used to save the Union in the 1860’s, the American economy in the 1930’s, and the wellbeing of mankind during
Economist John Maynard Keynes is credited with giving deficit spending academic legitimacy when he published “The General Theory” in 1936, even though many of his ideas were rebranded. (Deficit Spending, 2008) The advantages of deficit spending are that is helps
The United States of America’s government spending is rising, deficit is persistent, thus the federal debt reached alarming level during recent years. Endlessly skyrocketing the amount of debt in United States of America has been a huge concern to government and citizens. I interviewed two U.S. citizens for their opinions on government spending and national debt so to get different perspectives on this matter. They are Miss. Simpson, the History and Economics teacher at Ocean View Christian Academy, and Jiyoung Park, a college student that takes courses dealing with government and politics with huge interest. When asked what were their thoughts on national debt, Miss Simpson said, “ I do think it should be one of the top decisions that needs
Thomas Sowell said that, “The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending” (Hawkins, 2012). This quote is technical in describing the need for the government
In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...
Capital Asset Pricing Model (CAPM) is an ex ante concept, which is built on the portfolio theory established by Markowitz (Bhatnagar and Ramlogan 2012). It enhances the understanding of elements of asset prices, specifically the linear relationship between risk and expected return (Perold 2004). The direct correlation between risk and return is well defined by the security market line (SML), where market risk of an asset is associated with the return and risk of the market along with the risk free rate to estimate expected return on an asset (Watson and Head 1998 cited in Laubscher 2002).
What do you understand by the phrase “stakeholder analysis”? Attempt a stakeholder analysis of an organisation that you are closely associated with.
The cost of changes is divided into several groups, which include various elements associated with the stages of investment in the project.
Financial theories are the building blocks of today's corporate world. "The basic building blocks of finance theory lay the foundation for many modern tools used in areas such asset pricing and investment. Many of these theoretical concepts such as general equilibrium analysis, information economics and theory of contracts are firmly rooted in classical Microeconomics" (Oaktree, 2005)