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

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Question # 1

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 2

Per Capita income is obtained by dividing National income by

Question # 3

Net taxes are.

Question # 4

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 5

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

Question # 6

As the interest sensitivity of investment spending increase.

Question # 7

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

Question # 8

A state of government bonds by the central bank should cause

Question # 9

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

Question # 10

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

Question # 11

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

Question # 12

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 # 13

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 14

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

Question # 15

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

Question # 16

According to Marshall the basis of consumer surplus is.

Question # 17

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 18

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 19

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

Question # 20

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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Suppose a new law imposes a tax on all trades of bonds and stock 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 is ambiguous
D. Money demand declines
2 Which of the following persons would be considered unemployed.
A. a house wife
B. A person who worked more than 20 hours in a family owned business
C. A 15 years old looking for summer employment
D. A recent college graduate looking for her fist job
3 A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate
A. right ; fall
B. right ; rises
C. left ; falls
D. left ; rises
4 Which of the followig does not shift the IS curve .
A. An increases in autonomous consumption
B. An increase in government spending.
C. A decline in government spending
D. A fall in theinterest rate
5 The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.
A. Velocity of money
B. Nominal output
C. Overall price level
D. Stock of money
6 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
7 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
8 The quantity of money demanded varies.
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
9 What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
10 If the original money supply is MSo and the original demand for money is MDo then
A. The equilibrium interest rate and savings are 5% and 50
B. The money supply is 200 and equilibrium income is 500
C. The equilibrium interest rate and income are 5% and 600
D. The speculative demand is 25

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