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

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Question # 1

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

Question # 2

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 # 3

An item designed as money that is intrinsically worthless could the.

Question # 4

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 5

Net taxes are.

Question # 6

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

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

The intersection of the IS and LM curves captures.

Question # 9

Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.

Question # 10

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

Question # 11

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

Question # 12

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 13

The use of money is more efficient than barter because the introduction of money

Question # 14

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

Question # 15

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

Question # 16

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

Question # 17

"Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.

Question # 18

"The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.

Question # 19

Intermediate goods are meant for

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
2 The IS curve shifts to the left when
A. Taxes increase
B. Government spending increase
C. The money supply increases
D. All of the above occur
3 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.
4 an asset that can easily be exchanged for goods and services is called a.
A. Financial asset
B. Barter like asset
C. Illegitimate asset
D. Liquid asset
5 By controlling the monetary base economists mean
A. Controlling the money multiplier
B. Restricting the amount of cash in circulation
C. Not allowing commercial banks to issue notes and coins
D. making banks keep a certain % of their assets as M0
6 Which of the following causes M1 demand is decrease.
A. A fall in the tax rate
B. An increase in income
C. A fall in the interest rate
D. An increase in the use of credit cards
7 A change in the money supply has a greater effect upon equilibrium income.
A. The more interest sensitive private sector spending is.
B. The less interest sensitive private sector spending is.
C. The smaller the expenditure multiplier is
D. The more interest sensitive money holdings are to the rate of interest.
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 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
10 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right

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