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

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

Question # 2

The main role of the Federal Reserve is to

Question # 3

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

Question # 4

What is the significance of underestimating transactions money.

Question # 5

The quantity of money demanded varies

Question # 6

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

Question # 7

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

Question # 8

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 9

The IMF is an agency charged with providing.

Question # 10

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 11

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

Question # 12

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

Question # 13

Total utility of a commodity is measured by which price of that commodity.

Question # 14

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

Question # 15

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 # 16

In economics money refers to

Question # 17

Weighted monetary aggregates

Question # 18

Which of the following events will lead to a decrease in the demand for money.

Question # 19

Which of the following would qualify as an aggregate demand shocks.

Question # 20

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
2 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
3 If the Central Bank wanted to decrease the quantity of money held by the public it would.
A. Sell government securities
B. Buy government securities
C. Lower the legal reserve requirement
D. Raise taxes
4 If the demand for money increase relative to the supply of money
A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
5 The ____ lag for fiscal policy is generally _____ than it is for monetary policy.
A. Recognition ; shorter
B. Recognition ; longer
C. Implementation ; shorter
D. Implementation ; longer
6 If a perfectly competitive industry is in long run equilibrium all firms will
A. Have a marginal costs
B. Have identical supply curves
C. Operate at the point where marginal cost just covers all variable costs
D. Have equal fixed costs
7 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
8 An item designed as money that is intrinsically worthless could the.
A. A currency note
B. A silver coin
C. A barter item
D. Any tradeable commodity
9 If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.
A. Increase the minimum reserve asset ratio
B. Sell government securities on the open market
C. Buy government securities on the open market
D. Raise interest rates.
10 An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the
A. Net exports LM right
B. Net exports LM left
C. Money demand IS right
D. Money demand LM left

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