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

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PPSC Economics Topic 4 Monetary & Fiscal Policy

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Question # 1

A change in the money supply has a greater effect upon equilibrium income.

Question # 2

In the Keynesian cross diagram a decline in autonomous consumer expenditure causes the aggregate demand function to shift down The equilibrium level of aggregate output to ___________ and the IS curve to shift to the

Question # 3

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Question # 4

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 5

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 6

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 7

Knowledge of the money supply can lead to good predications of nominal GDP only

Question # 8

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 9

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 10

Why would corporations want to achieve zero balances in their checking accounts.

Question # 11

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 12

According to the Laffer curve as tax rates increase tax revenues.

Question # 13

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 14

As a result of the increase in government expenditures disposable income increases by.

Question # 15

As the required reserve ratio is decreased the money multiplier.

Question # 16

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 17

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 18

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

Question # 19

An example of discretionary fiscal policy would be.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____
A. A movement along the AS curve cost push inflation
B. A leftward shift int he AS curve demand pull inflation.
C. A right ward shift in the AS Curve cost push inflation
D. a left ward shift in the AS curve cost push inflation
2 A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.
A. decreases ; rise
B. decreases ; fall
C. increases ; rise
D. increases ; fall
3 An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports
A. Less ; decreases
B. Less ; increases
C. More ; decreases
D. more ; increases
4 The market price of bonds can fluctuate depending on
A. How many bonds were sold
B. Who bought the bonds
C. The amount of the coupon
D. The interest rate
5 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise
A. demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
6 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases
7 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
8 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
9 A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______
A. decreases ; rise
B. decreases ; fall
C. Increases ; rise
D. Increase ; fall
10 The function of money do not include.
A. an exchange of purchasing power
B. A unit of account
C. A medium of exchange
D. A store of value

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