Introduction to Marco Econ See attachment 

Bonus Problem Set: Due by the Final Exam

Econ 202: Principles of Macroeconomics

Choose one of the following prompts and respond in 500 to 750 words. Cite any sources

quoted or paraphrased. Your response will be graded check plus, check, or check minus, and,

if higher, will be used to replace the lowest problem set grade.

1. Much was made of the government shutdown and the run up to the debt limit deadline in

the United States in Fall 2013. Explain why the shutdown occurred and discuss the impact

on the US economy (in hindsight). Space permitting, discuss the implications of a potential

US failure to raise the debt limit.

It has been suggested that China may be moving towards major economic reforms in two

areas: 1) land reform in rural areas and 2) weakening the monopoly power of the State-

Owned Enterprises (SOEs). Prompts 2. and 3. focus on these areas:

2. Discuss the process of urban land reform beginning in the 1980s. How were property

rights allocated from 1949 through the late 1980s? How about after the reform? How has

that helped the access to credit in China? What are the implications of rural land reform?

3. Discuss the role of the State-Owned Enterprises (SOEs) in China. Why might the

government be interested in breaking their monopoly power? What criticisms have the SOEs

faced in the past? Why might it be politically difficult to reform the SOEs too quickly?

4. The role of foreign aid in developing countries is highly controversial. Summarize some

of the theory and evidence provided by a prominent detractor (for example, Angus Deaton

or Dambisa Moyo) and a prominent supporter (for example, Jeffrey Sachs or Paul Collier).

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