OLD FINAL (FALL 2000)PART I. Paired Identification (24 points total; 18 minutes total)Choose two of the following three pairs of items. Define or identify each term in the pair. Thendescribe one way in which the two items are different. Each answer is worth 12 points total. Youshould spend about 9 minutes on each question.(1) (a) Labor market opportunities as a factor explaining changes in fertility in the 19th century and(b) Labor market opportunities as a factor explaining changes in fertility in the second half of the20th century(2) (a) Price of natural resources as a factor explaining labor productivity growth in the late 19thcentury and (b) Price of natural resources as a factor explaining labor productivity growth in thelate 20th century(3) (a) Prejudice versus “rational” economic behavior as a factor explaining the existence ofmarriage bars and the reason they ended and (b) Prejudice versus “rational” economic behavior as a factor explaining the existence of slaveryand the reason it endedPART II. Table and Graph Identification (24 points total; 18 minutes total) Answer all threequestions.(1) (8 points total; about 6 minutes) What is the first graph saying? What is the second graphsaying? What are the economic and historical implications of the graphs?(Graphs were taped in by hand)(2) (8 points total) What are the data in the table saying? What is the graph saying? What is theeconomic connection between the data in the table and the data in the graph? Percent of BachelorDegrees Earned by Women1950 241970 431990 53Source: Statistical Abstract 1999,Table 331.(3) (8 points total) What are the data in the first table saying? What are the data in the second tablesaying? What accounts for the difference in the patterns between the first and second tables? Wholesale Price Index(1850-59=100)1776 1081777 3301778 5981779 2,9691780 10,5441781 5,0861782 140Source: U.S. Bureau of the Census,Historical Statistics of the United States,Colonial Times to 1970, (1975), SeriesZ557, p. 1196.Wholesale Price Index(1967 = 100)1940 40.51941 45.11942 50.91943 53.31944 53.61945 54.6Source: U.S. Bureau of the Census,Historical Statistics, Series E23.Part III. Using Economic Models and Concepts to Explain Historical Events (36 points total; 27 minutes total) Answer all three questions.(1) (12 points) What are the demographic factors contributing to a “crisis” in Social Securityfunding? According to Lee and Skinner, what changes must be made to make the Social Securityprogram financially viable over the next 30 or so years?(2) (12 points) Following Segal and Sullivan, use the concepts of fixed costs and variable costs toexplain the pattern of demand for workers in the temporary help industry since 1972. Be sureyou demonstrate your knowledge of “fixed costs” and “variable costs” in your answer.(3) (12 points) Following Rowthorn and Ramaswamy, use your knowledge of the differencesbetween productivity growth in services and productivity growth in manufacturing to explaindeindustrialization.PART IV. Short Essay Question (16 points total; 12 minutes total)Answer one of the following two questions. Base your answers on lecture, discussion section, and theassigned reading. Complete answers will draw from all three sources. (1) a. (10 points) Using an aggregate production function that includes both private capital and publiccapital, explain why the type of government spending matters to long-run economic growth. Overthe last 30 or so years, has the U.S. federal government been shifting its spending toward or awayfrom growth-enhancing expenditures? Describe one policy of the Clinton Administration thatcontributed to long-run economic growth.b. (6 points) Government policy in the 1960s and 1970s was focused on short-run unemployment andinflation tradeoffs. Using the concept of the Phillips Curve, describe one policy of the Kennedy,Johnson, or Nixon Administrations that attempted to change unemployment and inflation.(2) a. (10 points) Describe and explain what is meant by “the rise of the service sector.” Are service jobs“good” or “bad” jobs? Explain.b. (6 points) Some economists claim the rise of the service sector is equivalent to “deindustrialization”of the American economy. Give one reason why economic policy should be designed to slow therise of the service sector. Give one reason why policy should not be designed to slow the rise.Final Essay Question (28 points)We have woven together three strands of U.S. economic history in Economics 113: economic growth,development of infrastructure, and inequities in economic treatment. Sometimes these three strandscame together in one tale. For example, we discussed the removal of Native Americans from the land,the financial and governmental institutions that enabled increases in land ownership, and the role ofincreased land and land productivity in contributing to economic growth. We also discussed inequitiesin the context of slavery, discrimination, and distribution of income and wealth. Economic historians —and hopefully now you, too — believe that studying history can provide new perspectives on recenteconomic patterns and on the potential for further economic growth and development in the 21st century.In this essay, you will: • First, set the stage. Present and explain the aggregate production function that can be used to discussissues of growth in contemporary and historical contexts. Show the relationship between output percapita (Y/P) and its determining factors. Highlight the theoretical sources of growth. Discuss therole for development of infrastructure. • Next, illustrate the three strands of economic history (growth, infrastructure, inequities). Choosethree examples — one illustrating growth, one illustrating development, one illustrating inequity —with one example from each of three time periods: pre-1860, 1860-1940, and 1940-2000. For each example, describe the historical event/episode. How does it illustrate economic growth,development, or inequities in economic history? What happened? Why? How? What was theimpact? The determinants? Provide any relevant economic analysis. The more specific and complete your examples, the more coherent your writing, and the moreappropriate your examples to a discussion of American economic history, the better your grade. • Conclude your essay by pointing to the future. As we enter the 21st century, what is the potential