Economic Systems as Vital Organisms — Economic Systems as Living Systems examination

Eleven questions. Nine of eleven passes, and you can take it again as often as you like.

What does Timothy help Agnes see about her bakery?

She must stop inventing new flavours and return to the classics She should move the bakery to a larger and busier town nearby, as conventional wisdom often suggests Her prices have crept far too high for the people of the village The village needs her baking as nourishment for its social fabric
Which core concept does the tale of Agnes and Bumblebrook introduce?

Interdependence, as cells in a body rely on one another Efficiency, in which output per hour is all that counts Competition, in which the strongest shop always wins Scarcity, in which resources always end up running short
Which four abilities does the module say define a living system?

Growing, competing, dominating others and replicating itself Self-organising, homeostasis, adapting Consuming, storing, spending and saving its available resources Planning, controlling, measuring results and reporting upward
What does homeostasis mean in this module?

Staying entirely unchanged whatever the conditions Keeping crucial parameters in a viable range through feedback Refusing any exchange with the surrounding environment Growing larger without any limit on eventual size, in the majority of common situations
How do economies self-organise, according to the module?

A central ministry allocates every available resource Firms agree all of their prices once each year Prices act as signals guiding resources to demand Consumers are instructed on exactly what to buy
How do economies differ from forest ecosystems, in the module's account?

They cannot adapt, because they follow fixed natural rules They regenerate over millennia without any human input They are closed and exchange nothing with their surroundings Human decisions, policies and norms shape them
What does the module conclude about economic crises and antifragility?

Build systems that learn from disruption, without seeking crises Crises should be triggered on purpose to strengthen an economy, according to how most people initially approach it Crises have no real bearing on how economies adapt over time Crises always leave economies permanently weaker than before
In dP/dt = rP(1 − P/K), where does the module locate the feedback loop?

In the time variable t, which marks each passing year In the P term alone, which measures current size In the r term, which sets reproductive potential In the (1 − P/K) term, which slows growth near K
A portfolio is 60% stocks at 10%, 30% bonds at 4.5% and 10% real estate at 6%. What is its weighted expected return?

10% 7.8% 6.8%, even before any of the inner work has been done 8.5%
How does the personal framework treat savings and high-interest debt?

Savings as a loop to automate; debt as a drag to pay down Savings as a drag on growth; debt as a safety net Debt as a growth engine; savings as money left idle Both as neutral flows that need no particular attention, which is the assumption most people start with
What limit does the module place on mathematical modelling of economies?

It can capture every nuance of human behaviour entirely on its own, especially in the early stages It has no relevance to understanding how real economies work It must be joined with qualitative, historical and ethical analysis It should replace historical context and judgement entirely