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

The rate of which central bank lends to commercial banks is known as

Question # 2

There are ______ methods of measuring GDP

Question # 3

Which of the following persons would be considered unemployed.

Question # 4

If firms paying employees monthly began paying them weakly then the demand for money would.

Question # 5

Knowledge of the money supply can lead to good predications of nominal GDP only

Question # 6

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 7

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 # 8

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

Question # 9

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 10

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.

Question # 11

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.

Question # 12

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Question # 13

The function of money do not include.

Question # 14

If the original money supply is MSo and the original demand for money is MDo then

Question # 15

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

Question # 16

Which of the following measures is the best measure of money as a medium of exchange.

Question # 17

A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.

Question # 18

An increase in expected inflation is likely ot cause.

Question # 19

A checking deposit held at a commercial bank is considered ______ of that bank.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
2 Money and income are.
A. Mirror image of each other
B. Two quite different concepts
C. Both measured as a per annum flow
D. Two ways of looking at the same thing.
3 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
4 In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to
A. increase ; increase
B. Increase ; decrease
C. decrease ; decrease
D. decrease ; increase
5 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
6 The central bank and the government are working against each other if as the government cuts taxes the central bank
A. Sells government bonds
B. Lowers the discount rate
C. Increase the money supply
D. Decrease the legal reserve requirements
7 How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.
A. Rs.3.5 billion
B. Rs.1.5 billion
C. Rs. 4.9 billion
D. Rs.2.8 billion
8 The IMF is an agency charged with providing.
A. Technical assistance to stock market and financial market problems.
B. Loans for post World War II reconstruction
C. Short term credit for international balance of payments deficits
D. Bonds denominated in U.S. dollars as a loan to LDCs
9 A checking deposit held at a commercial bank is considered ______ of that bank.
A. An asset
B. Net worth
C. a liability
D. Capital
10 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

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