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

There are _______ major instrument of monetary policy.

Question # 2

If the central Bank wished to Tighten money is would.

Question # 3

Which of the following persons would be considered unemployed.

Question # 4

How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.

Question # 5

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 6

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

Question # 7

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

Question # 8

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

Question # 9

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

Question # 10

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

Question # 11

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 12

What's the most common way for a central bank to reduce the money supply.

Question # 13

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

Question # 14

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

Question # 15

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Question # 16

Which of the following part of M1

Question # 17

Fiscal policy refers to the manipulation of government income and expenditure to.

Question # 18

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 19

The equilibrium level of income is.

Question # 20

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
2 The board pumps money out of the economy by
A. Buying bonds
B. Selling bond
C. Creating cash
D. Lowering the reserve requirements.
3 A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.
A. decreases ; right
B. decreases ; fall
C. increases ; rise
D. increases ; fall
4 According to Marshall the basis of consumer surplus is.
A. Law of diminishing marginal utility.
B. Law of equal marginal utility
C. Law of proportions
D. All of the above
5 In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right
6 Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.
A. Money demand rises proportionately to the rise in wealth.
B. Money demand rises, but less than proportionately to the rise in wealth.
C. The overall effect in ambiguous
D. Money demand declines
7 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
8 As a result of the increase in government expenditures disposable income increases by.
A. Rs.10 billion
B. Rs.9 billion
C. Rs.20 billion
D. Rs.5 billion
9 A 15% VAT is a.
A. Proportional income tax
B. Fixed excise duty
C. Ad valorem indirect tax
D. None of the above
10 The relation between M2 and inflation is tighter than the relation between M1 and inflation because.
A. M1 is larger than M2
B. The demand for M2 is more stable
C. M1 includes more liquid assets the M2
D. None of the above answers is correct.

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