econ 465 final exam study guide

econ 465 final exam study guide - capital-labor ratio over...

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Final Examination Economics 465 Spring 2011 Answer any 4 of the following 6 questions. 1. Assume that carbon emissions are the principal cause of the projected global warming and that such warming will result in significant economic costs over the next century. Present a rationale for why the rate of return on capital and technological growth should affect the rate at which we attempt to reduce carbon emissions. 2. Both Medicare and Social Security are intergenerational transfers financed on a pay-as- you-go basis. Under what conditions do such intergenerational transfers become Ponzi schemes? Describe the risks to beneficiaries and payers in a pay-as-you-go system. 3. The response of world governments to the current economic crisis has resulted in a significant increase in the level of sovereign debt, at least in the developed world. What are the factors that make the level of sovereign debt important for the future? 4. The demographic reality in the developed world will result in a significant increase in the
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Unformatted text preview: capital-labor ratio over the next two decades. How, if at all, will this change affect the income in the developed world? Depending on your answer to this first question, do you expect an effect on the less developed world? If so, what effect? If not, why not? 5. Periods of rapid expansion in the money supply have historically led to significant levels of inflation. What are the components of the last two years of action by the Federal Reserve that may result in inflation? Would this inflation, if it occurs be bad? If yes, who would it affect and why and if no, why not? 6. The current level of political uprising in the Middle East raises the specter of another temporary but significant reduction in the world’s oil supply. Invariably, these supply interruptions increase the public pressure for energy independence. Outline policies to achieve independence and evaluate the cost and benefits. Be sure to specify the nature of the cost and benefits....
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This note was uploaded on 02/13/2012 for the course ECON 465 taught by Professor Staff during the Fall '08 term at Texas A&M.

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