PPSC Economics Topic 4 Monetary & Fiscal Policy

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

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Question # 1

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

Increases ; increases ; right A
Increases ; decreases ; left B
decreases ; increases ; left C
decreases ; decreases ; right D

Question # 2

By financial crowding our economists mean

What the government borrows cannot be used for private investment A
Government borrowing drives up interest rates. B
Bank of England controls on commercial bank lending C
Credit rationing D

Question # 3

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

The more interest sensitive private sector spending is. A
The less interest sensitive private sector spending is. B
The smaller the expenditure multiplier is C
The more interest sensitive money holdings are to the rate of interest. D

Question # 4

The main source of interest profits for banks is.

Checking account fees A
Loans B
Government securities C
Savigng accounts D

Question # 5

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

The price level increase by a factor of four A
The price level doubles B
The price level is unchanged C
The price level falls by one half. D

Question # 6

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

Pont Eo to point E1 A
Pont Eo to point E2 B
Pont Eo to point E3 C
Pont E3 to point E2 D

Question # 7

If Federal reserve conducts open market sales, the money supply _ shifting the LM curve to the___

decreases ; right A
decreases ; left B
Increases ; right C
Increase ; left D

Question # 8

an asset that can easily be exchanged for goods and services is called a.

Financial asset A
Barter like asset B
Illegitimate asset C
Liquid asset D

Question # 9

" A growing number of economists view the Fed's new willingness to take on more of the nation's debt as inflationary in the long run." This inflation worry is because.

The government may tax less A
The debt may become excessive B
The government may spend more C
The money supply may increase excessively D

Question # 10

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

IS ; right A
Is ; Left B
LM ; Left C
LM ; Rfight D

Question # 11

A good that is used as a medium of exchange as well as being a consumption good is called.

A barter money A
A commodity money B
A legal tender C
A debased money D

Question # 12

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

An upward stopping LM curve A
A downward sloping L curve B
A downward sloping IS curve C
The circular flow of money in the economy. D

Question # 13

The money multiple tells us teh ultimate increase in.

The income level due to an increase in the money base A
The money supply due to an increase in the money base. B
The money supply due to an increase in the income level C
The income level due to an increase in the money supply D

Question # 14

To move from point E to point E1 is consistent with.

Expectations of a constant price level A
Adaptive expectations that have no adjustment for the period immediately following a change in the actual price B
Rational expectations and NCM C
A and B D

Question # 15

If the central bank prints more 10 billion and spends them then as a direct result of this action.

M1 and M2 both increases A
Neighed M1 nor M2 increase B
M1 increase but M2 does not C
M2 increased but M1 does not. D

Question # 16

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Sell government securities on the open market. A
Reduce the minimum reserve asset ratio B
Buy government securities on the open market. C
Lower interest rates D

Question # 17

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

To eliminate seignior age A
To allow open market operations B
To enhance the credibility of monetary policy. C
None of the above D

Question # 18

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

decrease ; decrease A
decrease ; increase B
Increase ; decrease C
increase ; increase D

Question # 19

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _the equilibrium level of aggregate output to __l and the IS curve Curve to shift to the.

rise ; left A
rise ; right B
fall ; left C
fall ; right D

Question # 20

When the central Bank ____ the money supply the LM curve shifts to the _ interest rates __________ and equilibrium aggregate output.

Increase ; right ; fall; increase A
increases ; left ; rise ; decrease B
decreases ; left ;rise ; increases C
decreases ; left ; fall ; increases D

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PPSC Economics Topic 4 MCQS Test Preparation

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

PPSC Economics Topic 4 Monetary & Fiscal Policy

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

By financial crowding our economists mean

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

The main source of interest profits for banks is.

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

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

an asset that can easily be exchanged for goods and services is called a.

" A growing number of economists view the Fed's new willingness to take on more of the nation's debt as inflationary in the long run." This inflation worry is because.

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

A good that is used as a medium of exchange as well as being a consumption good is called.

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

The money multiple tells us teh ultimate increase in.

To move from point E to point E1 is consistent with.

If the central bank prints more 10 billion and spends them then as a direct result of this action.

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

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

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

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

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

If Federal reserve conducts open market sales, the money supply _ shifting the LM curve to the___

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

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _the equilibrium level of aggregate output to __l and the IS curve Curve to shift to the.

When the central Bank ____ the money supply the LM curve shifts to the _ interest rates __________ and equilibrium aggregate output.