PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	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 rise and the IS curve to shift to the	A. up ; right B. up ; left C. down ;left D. down ; right
2	The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.	A. Milton Friedman B. Ronald reagan C. Margaret Thatcher D. John Maynard Keynes
3	Monetary policy can affect output.	A. this statement is always true B. This statements always false C. This statement is true only in the short run D. This statement is true only in the medium run and the long run
4	Knowledge of the money supply can lead to good predications of nominal GDP only	A. If the price level is stable B. If the money supply is stable C. Over very short periods of time D. If the determinants of velocity are known
5	When a government prints money to finance its expenditures it is likely to cause	A. Unemployment B. Inflation C. Deflation D. Reductions in the use of barter
6	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
7	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
8	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
9	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
10	A state of government bonds by the central bank should cause	A. Bond prices to rise B. an increase in the supply of money C. An increase in chartered banks loans D. A decrease in reserves of the banking system.

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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

In the Keynesian cross diagram a decline in autonomous consumer expenditure causes the aggregate demand function to shift down The equilibrium level of aggregate output to ___________ and the IS curve to shift to the

Why would corporations want to achieve zero balances in their checking accounts.

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

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

The main source of interest profits for banks is.

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

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

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.

The purpose of fiscal policy is to

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

A monetary expansion is characterized by

Which policies are expenditure changing policies.

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

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.

Believers in the monetarist rule assert that

The function of money do not include.

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

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

A state of government bonds by the central bank should cause

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

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

Aggregate output and the interest rate are ____ related to government spending and are _ related to taxes.