The Michigan Daily--Friday, August 11, 1978-Page 13
'U' economists warn o slump
(Continued fromPaget1) HYMANS AND SHAPIRO explain half. business community hard-put to make
which could cause a recession. that two principal elements account for First, they say business fixed in- rational long-term investment
The revised control forecast for 1978- the second half inflation slow-down. vestment will drop in the second half of decisions, and the Administration and
79-based on the econometric model These include a decline in 1978 and will continue to dimish to the Congress appear not to be vibrating
compiled by the University Research homebuilding activity as short-term in- almost no real growth in 1979. Then this sypathetically.. .
Seminar in Quantitative Economics- terest rates rise and limit the weakening investment activity will add "With federal expenditures ex-
predicts: availability of mortgage funds; and a to the slowdown in GNP growth, which periencing shortfalls and tax collec-
" Growth of real gross natiopal modest ebb in the auto market, from a in turn will further the slackening in- tions rising due both to inflation and
product (GNP), the total market value 12 million vehicle annual sales rate in vestment activity in late 1979 and early rising payroll-tax rates, a status-quo
of the goods and services produced the first half of 1978 to an 11-and-a-half 1980. fiscal policy is very apt to subject the
each year, will decline to a 2.5 per cent million rate in the second half. Also, homebuilding activity will economy to a substantial likelihood of
annual rate in the second half of 1978, During the next year and a half, the decline through mid-1979, but will pick recession in 1979," the study concludes.
up towards the year's end because the
slow growth will ease mortgage
'With federal expenditures experiencing shortfalls availability. The economists also ex-
pect auto sales to increase to 11/4 We know about
and tax collections rising due both to inflation and million by mid1979. good grooming.
rising payroll-tax rates, a status-quo fiscal policy is ". . . THE U.S. economy is at a
critical point on a number of fronts," UM st
very apt to subject the economy to a substantial likeli- the study states. "Inflation is running
hood of recession in 1979.' well above the rates of a year ago and at the UNION.
wage demands are speeding up in
-forecast of 'U' economists response, interest rate levels are Dave, Harold &
nearing earlier peaks, the dollar is Chet.
being clobbered on international ex-
down from 3.6 per cent in the first half, economists predict the growth of the change markets, the energy program is
resulting in a real GNP level 35 n er real GNP will decline to iust under 2 ner nowhere and continues to leave the


cent above the 1977 rate.
" An unemployment rate of over six
per cent for 1978, near the 6.2 per cent
level released by the government for
July.
* An inflation decrease to 7.4 per cent
for the second half of 1978, compared to
19 per cent in the first half. This implies
that consumer prices will rise 7.1 per
cent over the 1977 level.

cent in the spring quarter of 1979, then
hit 2.7 per cent in the beginning of 1980.
"Overall a rather disappointing per-
formance, despite the $16 billion tax cut
assumed in this control forecast," the
economists observe.
HYMANS AND SHAPIRO listed
three factors as underlying factors in
the predicted "shallow saucer" of
economic growth in the next year and a

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AP tests give some
freshpersons the edge
(Continued from Page3) have some trouble assimilating studen-
years to complete their undergraduate ts who have earned AP credit and must
work. Swain said the majority took readjust standards for accepting AP
more advanced classes in the same scores for a particular course. He said,
field in which they earned AP credit. In for example, AP credit doesn't always
addition, he said many students who "mesh" with the honors math sequen-
placed out of several courses were not ce.
ready to commit themselves to a major Sophomore Gordon White placed out
after such a short time at the Univer- of Math 115 last fall and says he wasn't
sity and stayed on four years to com- prepared for 116 which he took winter
plete the traditional degree program, term.
though with far fewer introductory White said his AP credit "didn't
classes than classmates who did not really pay off." He said he had to work
earn credit through AP exams. harder than other students in his 116
"BUT IT PAYS off at the other end," class and did not earn as high a grade
added Swain, referring to students who as he thinks he would have if he had
begin taking graduate level courses taken 115 at the University.
during their senior year. , "IT WILL BE hard when I have 215 in
Swain said his office regularly the fall because I really didn't get
questions faculty members ro see if enough out of 116," White added. "I'll
they have anycomplaints with the ac- probably have problems all the way
celerated course system. He said he down the line."
hasn't received much "negative feed- Swain said determining which
back" from the faculty. students will receive Advanced
Acting English department Chair- Placement is difficult for colleges since
man James Gindin said the freshper- students come from varying tyoes of
sons who placed into the 200-level cour- high schools and different backgroun-
se he taught last term did "perfectly ds.
good work." He suggested, however, The exams are scored nationally by a
that one explanation for this perfor- group of "readers", high school and
mance is that students who take the AP college teachers, who grade the exams
exams tend to be more intelligent and on a scale from 1-5. It is then up to the
would do better in their course work individual departments within each
anyway. college and university to determine
"I DON'T THINK it's the program as what score is required to place out os a
much as the type of student," said Gin- particular course.
din. MANY HIGH SCHOOLS offer special
Michael Shostal, a history major who courses to groom students for the AP
placed out of introductory American exams. Swain, however, stressed that
history, said she had no problem ad- students often do well on AP exams
justing to upper level courses even without taking a specially-designed
though she had not taken the usual high school course.
prerequisite. Huron High School Principal Paul
"knew what was going on and I got Meyers said students who take the for-
to ke more interegti mal AP classes at Huron are, "bright
s- 4'ctW; A I / l 1glire = a'd-seriods about
SWAIN SAID some departments do academics"