PPSC Economics Topic 4 MCQS Test Preparation

Punjab Public Service Commission, PPSC takes the competitive exam to offer the deserving candidates suitable positions in several governmental organizations. Candidates who are willing to apply for the coming PPSC examination session with the subject of Economics are advised to start their preparation as soon as possible. The reason behind this endorsement is that candidates with exceptional results secure suitable positions and the exceptional result is a result of exceptional preparation.

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

Try The MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Topic 4 Monetary & Fiscal Policy

00:00
Question # 1

Identify the three motives of money demand.

Question # 2

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 3

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 4

Which of the following measures is the best measure of money as a medium of exchange.

Question # 5

A monetary expansion is characterized by

Question # 6

The money multiple tells us teh ultimate increase in.

Question # 7

The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.

Question # 8

An example of discretionary fiscal policy would be.

Question # 9

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Question # 10

The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.

Question # 11

An increase in expected inflation is likely ot cause.

Question # 12

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 13

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

Question # 14

The intersection of the IS and LM curves captures.

Question # 15

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

Question # 16

By controlling the monetary base economists mean

Question # 17

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 18

If the demand for money increase relative to the supply of money

Question # 19

If young busness professionals in Pakistan suddenly decide that driving japan made cars is an important status symbol net exports will tend to _____________causing aggregate demand to.

Question # 20

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Money or paper currency serves at least _______ functions.
A. Three
B. Four
C. Five
D. Seven
2 The main source of interest profits for banks is.
A. Checking account fees
B. Loans
C. Government securities
D. Savigng accounts
3 Other things equal a decrease in autonomous consumption shifts the _____ curve to the
A. IS ; RIGHT
B. IS ; Left
C. LM ; Left
D. LF ; Right
4 If the Bank of Pakistan wished to pursue a tight monetary policy is would.
A. Sell government securities on the open market.
B. Reduce the minimum reserve asset ratio
C. Buy government securities on the open market.
D. Lower interest rates
5 If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.
A. Purchases ; decreases
B. sales ; decreases
C. purchases ; increases
D. sales ; increases
6 Fiscal policy refers to the manipulation of government income and expenditure to.
A. control the volume and price of money
B. Limit the rate of increaes in incomes
C. Effect the value of the dollar on world financial market.
D. Affect the level of total expenditure output and employment
7 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
8 When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.
A. more ; iincreases
B. less ; increases
C. more ; decreases
D. more ; increases
9 An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
10 Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.
A. Positively ; positively
B. Positively ; negatively
C. negatively ; positively
D. negatively ; negatively

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