PPSC Economics Topic 4 Monetary & Fiscal Policy

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.

Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

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Shiza Amir 25 - May - 2022 02 Min 08 Sec 18/20
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khurram shazzz 02 - Mar - 2022 04 Min 47 Sec 18/20
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Shahida 01 - Sep - 2021 06 Min 25 Sec 17/20
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Ayesha siddiqa 02 - Jul - 2021 19 Min 10 Sec 17/20
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Tayyeba 29 - Jun - 2021 09 Min 28 Sec 16/20
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Funny world with amazing facts 22 - Apr - 2022 06 Min 10 Sec 15/20
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sidra Naeem 22 - May - 2022 13 Min 44 Sec 13/20
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Abdul Qayyum 25 - May - 2024 07 Min 53 Sec 12/20
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Hassan Mehmood 03 - Apr - 2022 08 Min 20 Sec 12/20
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Shama Suleman 21 - May - 2022 12 Min 21 Sec 12/20
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Amjad Ali 07 - Jun - 2023 12 Min 49 Sec 12/20
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Shad Ali Shah 27 - Jul - 2024 15 Min 17 Sec 12/20
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DJ DJ 12 - Aug - 2022 11 Min 02 Sec 11/20
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zaheer hussain 18 - Jan - 2024 14 Min 06 Sec 11/20
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Mahnoor NaSir 24 - May - 2022 07 Min 27 Sec 9/20

Sr. #	Question	Answer
1	According to classical models, the level of employment is determined primarily by	A. The level of aggregate demand for goods and services B. Prices and wages C.Government taxation D. Government spending
2	A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______	A. rise ; LM ;right B. rise ; IS ; right C.Fall ; LM ; left D. rise ;IS; right
3	"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.	A. A higher interests rate B. A higher reserve requirement C.a decrease in the money supply D. An increase in the money supply
4	Money or paper currency serves at least _______ functions.	A. Three B. Four C.Five D. Seven
5	Which of the following would qualify as an aggregate supply shock.	A. An unexpected increase in oil prices B. Seasonally expected increase in oil prices C.An unexpected reduction in consumer confidence D. an anticipated tax cut
6	"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.	A. Upward B. Down ward C.To be zero D. To match inflation
7	During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.	A. Stimulate the economy and increase empolyment. B. Result in additional recessionary declines in employment and income C.Stimulator defiance spending D. Have an automatic stabilizing impact upon the economy
8	Which of the following measures is the best measure of money as a medium of exchange.	A. M1 B. M2 C.M3 D. None of the above
9	Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.	A. Reduce a balance of payments surplus B. Reduce a balance of payments deficit C.Increases both imports and exports D. Decrease both imports and exports
10	Fiscal policy refers to the manipulation of government income and expenditure to.	A. control the volume and price of money B. Limit the rate of increaes in incomes C.Effect the value of the dollar on world financial market. D. Affect the level of total expenditure output and employment
11	A Political problem with discretionary fiscal policy is the.	A. Contractionary bias B. Big state bias C.Expansionary bias D. Over reaction bias
12	You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.	A. If you live in a 1st best world. B. If you live in a 2nd best world C.If the tax rates on some of the items are prohibitively high D. Either of the above
13	A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate	A. Rises ; rises B. rises ; falls C.falls ; rises D. falls ; falls
14	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.
15	A business cycle refers to.	A. Fluctuations in the general price level B. changes in the long term growth pattern of the CPI C.The ups and downs of real GDP D. Fluctuations in the level of corporate.
16	In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.	A. up ; rise B. up ; fall C.down ; rise D. down ; fall
17	A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the	A. right ; left B. right ; right C.left ; left D. left ; right
18	Credit constitutes.	A. Saving made available to borrowers B. A form of liquid asset C.bank loans converted into commodity money D. Money used as a standard of deferred payment.
19	A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.	A. fall ;LM; right B. fall ;IS; Left C.fall ;LM; Left D. rise ;LM; Rifht
20	A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.	A. Reduce B. Increase C.Have no effect on D. Double

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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

What major advantage of monetary policy over fiscal policy does this clipping underline.

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

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

Identify the three motives of money demand.

The largest source of tax revenue for the federal government is.

In economics money refers to

A Political problem with discretionary fiscal policy is the.

How do the banks gain from this corporate behavior.

Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.

The market price of bonds can fluctuate depending on

Large difference is inflation rates among countries are almost always the result of large difference in.

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

A decrease in the legal reserve ratio from 25% to 20% will

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.

"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.

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.

Which of the following causes M1 demand to decrease.

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

If the Central Bank wanted to decrease the quantity of money held by the public it would.

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

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

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.