PPSC Economics Chapter 11 Assess Your Basics With Answers

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PPSC Economics Chapter 11 Assess Your Basics

Sr. # Questions Answers Choice
1 If the central bank buys financial securities in the open market to increase the monetary base, this is an example of. Lender of last resort Financial intermediation Open market operations Financial regulation.
2 M4 is a _________ measures of money and includes deposits at both _____________ and Narrow, banks, building societies <i>Wide, banks, insurance companies</i> narrow, banks, insurance companies Wide, banks, building societies.
3 When real income increases, other things equal we fan expect the demand for real money holdings to. Fall Not change Increase Decrease
4 If I keep some money available in case I see a bargain this is an example of. Asset demand for money Transactions demand for money Token demand for money Precautionary demand for money
5 If banks and the private sector decide to hold less cash the money multiplier will be. Unchanged Larger Smaller unstable
6 Bank create money by Printing it Issuing debit cards Accepting chequeens Lending out part of their deposits
7 The primary function of a bank is to. Control the money supply Provide notes and coins for trade Make a profit Provide a chequeen clearing system.
8 Higher export demand _______ output and a higher MPZ______ output.. Reduces, reduces Reduces, increases Increases, reduces increases, increases
9 In an open economy leakages to imports ______ the value of the multiplier. Reduce Increase do not change None of these
10 When the level of income _______ there will be atendency for the trade balance to improve as imports. Increases, increase falls, fall Increase, fall fall , increase
11 The total multiplier for the economy will reflect. MPC and MPT MPT and MPZ MPC and MPZ MPC, MPT and MPZ
12 Aggregate demand in an economy trading internationally with a government sector can be written s. AD = C+1 AD = C + 1+ G AD = C +1+G+X+Z AD+C+1+G+X-Z
13 For given government spending and taxation the government budget deficit will grow in __________ and decline in _________ booms, booms recession, recession booms, recessions recessions, booms
14 Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to. Move into surplus Move into deficit Remain unchanged None of these
15 If the government increase spending and raises taxes by just enough to finance the increase it will. Leave output unchagned Increase output Reduce output Increase the MPC
16 Aggregate demand without a foreign sector is the sum of. c+1 C+G 1+G C+!+G
17 If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of. Market imperfection The law of diminishing returns The paradox of thriff Market failure
18 If the MPC is 0.5 the multiplier is 2 1/2 0.2 20
19 The multiplier is calculated as. 1(1-MPC) 1/MPS 1/MPC a or b
20 The multiplier tells us how much __________ chagnes after a shift in. Consumption, income Investment , output Savings, investment output, aggregate demand
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