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

  • Total Questions20

  • Time Allowed20

Start Test Download PDF

PPSC Economics Topic 4 Monetary & Fiscal Policy

00:00
Question # 1

A sale of bonds by the central bank should cause.

Question # 2

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

Question # 3

Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.

Question # 4

The function of money do not include.

Question # 5

The purpose of fiscal policy is to

Question # 6

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

Question # 7

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 8

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

Question # 9

The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.

Question # 10

The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.

Question # 11

The opportunity cost of holding currency decrease when

Question # 12

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

Question # 13

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

Question # 14

In the Keynesian cross diagram an increasing investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift _____ and the equilibrium level of aggregate output to.

Question # 15

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.

Question # 16

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 17

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

Question # 18

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

Question # 19

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Question # 20

Short run contractionary Fiscal policy would result in.

Submit

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers


Topic Test

00:00
Submit

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

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

PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if
A. The IS curve shifts left ward
B. The IS curve shifts right ward
C. The money supply increase
D. Taxes are cut
2 If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.
A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect its ambiguous
D. Money demand declines
3 As the interest sensitivity of investment spending increase.
A. Monetary policy has a larger effect on output
B. Fiscal policy has a larger effect on output
C. The multiplier increases
D. All of the above
4 A sale of bonds by the central bank should cause.
A. A fall in the interest rate
B. An increase in the money supply
C. A decrease in the reserves of the commercial banks
D. An increase in the commercial banks loans to the public
5 According to the supply side model a reduction in the tax rate.
A. Could reduce the size of any budget deficit
B. Would have no effect on output
C. Would have no effect on consumption
D. None of the above
6 Tax incidence is the
A. Ultimate distribution of a tax's burden
B. Measure of the inpat the tax has on employment and output
C.
Behavior of shifting the tax to another party
D. Structure of the tax
7 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
8 Which of the following causes M1 demand to 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
9 The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.
A. To eliminate seignior age
B. To allow open market operations
C. To enhance the credibility of monetary policy.
D. None of the above
10 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

Test Questions