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

00:00
Question # 1

Which of the following would qualify as an aggregate supply shock.

Question # 2

When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.

Question # 3

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Question # 4

The quantity of money demanded varies.

Question # 5

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

Question # 6

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

Question # 7

A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

Question # 8

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 9

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

Question # 10

A decrease in the legal reserve ratio from 25% to 20% will

Question # 11

As the required reserve ratio is decreased the money multiplier.

Question # 12

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Question # 13

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

Question # 14

The money multiple tells us teh ultimate increase in.

Question # 15

Monetary policy is concerned with influencing.

Question # 16

Money or paper currency serves at least _______ functions.

Question # 17

There are _______ major instrument of monetary policy.

Question # 18

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

Question # 19

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

Question # 20

A monetary action consistent with the central bank selling bonds in the open market would be.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Which of the following is not an important variable in growth accounting calculations.
A. Productivity growth
B. Money supply growth
C. Labor growth
D. Capital growth
2 "Far better for central bankers to get out of the fine tuning business instead they should d try to keep.
A. Taxes low
B. Budgets balanced
C. Money growth low
D. Government spending in check
3 The opportunity cost of holding currency decrease when
A. Income decreases
B. The interest rate on bonds decreases
C. The interest rate on money decrease wealth decrease
D. Wealth decreases
4 Disposable income is obtained by subtracting ________ taxes from personal income
A. Indirect taxes
B. Direct taxes
C. Subsidies
D. None
5 A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
6 A monetary action consistent with the central bank selling bonds in the open market would be.
A. An increase in the reserve ratio
B. A reduction in the discount rate of interest
C. An increase in government spending.
D. a reduction in excise taxes
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 there is no change in central banking holding of international reserve balances a country's
A. Trae balance always equals 0
B. Current account balance always equals 0
C. Capital account balance always equals 0
D. Balance of payments always equal 0
9 Why would corporations want to achieve zero balances in their checking accounts.
A. To earn more interest
B. To avoid paying taxes
C. to keep a low profile
D. To circumvent banking regulations
10 An example of nondiscretionary fiscal policy would be.
A. The operation of the welfare state
B. A Federal jobs program adopted to stimulate consumption
C. A tax cut adopted to stimulate consumption
D. An interest rate cut implemented to stimulate consumption

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