PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	A monetary action consistent with the central bank selling bonds in the open market would be.	A. An increase in the reserve ratio B. A reduction in the discount rate of interest C. An increase in government spending. D. a reduction in excise taxes
2	The money multiple tells us teh ultimate increase in.	A. The income level due to an increase in the money base B. The money supply due to an increase in the money base. C. The money supply due to an increase in the income level D. The income level due to an increase in the money supply
3	The board pumps money out of the economy by	A. Buying bonds B. Selling bond C. Creating cash D. Lowering the reserve requirements.
4	using money as a medium of exchange.	A. Requires people to math goods wanted with goods available. B. Reduces the range of feasible exchanges in the economy C. Inhibits economic transactions D. Reduces the need for barter in the economy.
5	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
6	A major advantage of monetary over fiscal policy is that monetary policty.	A. Can be put into effect more quickly B. Affects all sectors of the economy equally C. Authorities are quicker to see the need for policy D. Has a more direct and predictable impact on spending.
7	"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.	A. Lower interest rates B. Lower money supply C. Lower unemployment D. Higher inflation
8	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
9	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 _____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
10	As the required reserve ratio is decreased the money multiplier.	A. Could either increase or decrease B. Remains the same as long as banks hold no excess reserves C. Increase D. Decreases

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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

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

If a perfectly competitive industry is in long run equilibrium all firms will

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

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

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

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

What is the significance of underestimating transactions money.

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

An expansionary monetary policy

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

"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.

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

A change in the money supply has a greater effect upon equilibrium income.

Which of the following persons would be considered unemployed.

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 _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

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

PPSC Economics Chapter 4 Important MCQ's

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An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to ___ at any given interest rate and shifts the curve to the

An autonomous rise in the value of the Rupee makes Pakistan goods _ expensive relative to foresight goods which __ net exports

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _____ in net exports and a shift of the IS curve

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _ and the IS curve to shift to the _

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 _the equilibrium level of aggregate output to __l and the IS curve Curve to shift to the.