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

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

Question # 2

How do the banks gain from this corporate behavior.

Question # 3

The Central Bank controls money and credit with the exception of.

Question # 4

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 5

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.

Question # 6

The quantity of money demanded varies.

Question # 7

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

Question # 8

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 9

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

Question # 10

Increasing the government budget deficit.

Question # 11

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 # 12

A Political problem with discretionary fiscal policy is the.

Question # 13

A major advantage of monetary over fiscal policy is that monetary policy

Question # 14

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

Question # 15

The purpose of fiscal policy is to

Question # 16

The opportunity cost of holding currency decrease when

Question # 17

By financial crowding our economists mean

Question # 18

using money as a medium of exchange.

Question # 19

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 20

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Increasing the government budget deficit.
A. Increases output in the long run
B. Decreases output in the short run
C. Decreases output in the long run.
D. Decreases the interest rate in the medium run.
2 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
3 Which of the following part of M1
A. Stock negotiating accounts
B. Automatic transfer system accounts
C. Negotiable orders of withdrawal accounts
D. Demand deposits of mutual saving banks.
4 To move from point E to point E1 is consistent with.
A. Expectations of a constant price level
B. Adaptive expectations that have no adjustment for the period immediately following a change in the actual price
C. Rational expectations and NCM
D. A and B
5 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
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
6 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
7 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
8 Money or paper currency serves at least _______ functions.
A. Three
B. Four
C. Five
D. Seven
9 Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.
A. Panel b
B. Panel c
C. Panel a
D. Panel d
10 Factors that cause the IS curve to shift include.
A. Changes in autonomous consumer spending
B. Changes in government spending
C. Changes in investment spending related to business confidence
D. All of the above

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