1. There are two "parts" to this short-answer examination.

2. Don't necessarily select the "easiest-looking" questions. Select those which, in your judgment, give you the best and most balanced (incl. non-repetitive) opportunity to demonstrate your understanding of class-related concepts and tools.

3. Please define the crucial concepts before you begin to establish any relationships between concepts or make any analytical or explanatory suggestions. In general, such definitions will count for about 1/3 of the points. However, the remaining 2/3 cannot be given unless the important concepts have been defined.

4. You are encouraged to use examples whenever appropriate. However, use examples only AFTER you made the point or developed the argument for which you want to present an example.

5. Please write sufficiently legibly so that I can give you credit for your knowledge, insights and wisdom.

Part I: Appetizers: (20 minutes or points)

Explain the analytical significance of (i.e. not just define) five of the following concepts:

1. Collapsed row model (Tiebout)
2. Engel's Law
3. Leontief coefficient
4. b'_ij coefficient (as different from a b_ij coefficient)
5. General fertility rate
6. Import substitution
7. Alpha index (in network analysis)

Part II: 40 minutes (select two questions, 20 points or minutes each)

You have been hired as a regional economic policy analyst & personal advisor to accompany the State's governor to the National Governors Economic Conference. You are thrust into the following situations:

1. Your boss has overheard two fellow governors discuss "diversification" policies and would like to know from you
   1. what the advantages and disadvantages of such a policy may be for your state; and
   2. how one can measure and thereby monitor the degree of diversification. It seems that the Gov has heard about the "location quotient" but does not know how to apply the LQ to the measurement of diversification. Besides, he prefers a single-number measure, something he can call a diversification- or specialization index. He also has heard about Input-Output analysis and wonders how that might help measuring diversification.

   
   

2. On the second day, a speaker presents the results of a comprehensive 50-state shift/share analysis which made clear that some states benefited at the expense of others, i.e. that economic activities had shifted between states. Your governor was pleased to discover that your state showed a quite substantial positive shift, but had a hard time understanding what it meant that the state had an enormous positive "differential" (or "regional") shift component but also "suffered" from a negative composition or structural effect. The governor gives you 20 minutes to explain the difference between these two shift components to him.

   
   

3. On the last day of the meeting, Dick Conway, Seattle's nationally known regional economic analyst and forecaster, makes sure that the intellectually most demanding part of the economic conference was left for last. Conway expounds the advantages of taking an employment or income multiplier view of the state's economy when considering the pros and cons of a state's economic strategies. The governors are initially excited because they have heard in their college (macro-) economics classes of the Keynesian multiplier concept, but fall quiet, after Conway suggests that there is not one convenient multiplier but lots of different ones. Your task is to help your boss to sort out some of the differences between different kinds of income- or employment multipliers.