Answer two of the following questions published 13th December: Submission due 18th December 23.59. Late penalties apply.

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For each question, you should write as much as you would in 40 minutes in an exam, aim for 500-1500 words.

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Exam Questions ECN 202 Fall 2020

1. Explain and assess the arguments for ‘sound finance’, and austerity to reduce public debt, and weigh them against the arguments in favour of Keynesians and ‘functional finance’.
2. Give an account of the financial crash of 2008.
3. Inflation and deflation can both be damaging. Explain how, and what monetary policies can be used to counter both.
4. The Marginal Productivity theory of income determination implies everyone gets paid for the value they produce. Critically assess this claim, explore the arguments and evidence that count against it and outline the most prominent alternative theory of income distribution and inequality.
5. Explain why GDP is a flawed measure of well-being and explain the virtues and pitfalls of available alternative approaches and ways of thinking about this.
6. Why does asymmetric information cause market failure? Explore the examples of Akerlof’s ‘market for lemons’ and of health insurance, used by economists to explain this phenomenon. Why hasn’t it resulted in the collapse of markets in either of these cases?
7. Explain how free-market conservatives differ from Keynesians with regard to the following: i) The spontaneous tendencies of markets with regard to full employment. ii) Fiscal policy and recessions iii) The danger of inflation and how it relates to stimulus policy iv) The interaction of aggregate demand and aggregate supply and the price mechanism
8. I) Explain the difference between cyclical, seasonal, frictional and structural unemployment. II) Explain how and why different policies are appropriate to tackle structural as opposed to cyclical unemployment. III) Explain the concept of a natural rate of unemployment and how it assumes the truth of a conservative ‘free market’ theory of how capitalism works which Keynesian might challenge.
9. Compare the claims of the standard microeconomic theory of rational choice with the claims of Behaviourists. Which is more convincing? What do you think your answer imply for the ‘laws’ of economics?

Rubric

ECN Takeaway Exam Grading (1)