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

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Question # 1

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

Question # 2

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

Question # 3

Which of the following persons would be considered unemployed.

Question # 4

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 # 5

You move some of your savings account balance into your checking account.

Question # 6

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

Question # 7

Employment tends to _______ whwn aggregate output.

Question # 8

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

Question # 9

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 10

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 11

The situation in which the imports are greater than exports is termed as.

Question # 12

According to classical models, the level of employment is determined primarily by

Question # 13

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

Question # 14

If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.

Question # 15

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 16

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 17

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

Question # 18

According to Marshall the basis of consumer surplus is.

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 ______ and the equilibrium level of aggregate output to ______

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
2 The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.
A. Velocity of money
B. Nominal output
C. Overall price level
D. Stock of money
3 If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.
A. Purchases ; decreases
B. sales ; decreases
C. purchases ; increases
D. sales ; increases
4 An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.
A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages
5 By financial crowding our economists mean
A. What the government borrows cannot be used for private investment
B. Government borrowing drives up interest rates.
C. Bank of England controls on commercial bank lending
D. Credit rationing
6 An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
7 A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; Left
8 The investment demand curve shows the relationship between the levels of.
A. Investment and consumption
B. Consumption and Interest rate
C. Investment and interest rate
D. None
9 The opportunity cost of holding currency decreases when.
A. Income decreases
B. The interest rate on bonds decrease
C. Buying newly issued government bonds directly from the central bank
D. Buying newly issued government bonds directly to the central bank.
10 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias

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