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

Try The 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

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

Question # 2

The function of money do not include.

Question # 3

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

Question # 4

Which of the following would qualify as an aggregate demand shocks.

Question # 5

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

Question # 6

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 7

How do the banks gain from this corporate behavior.

Question # 8

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.

Question # 9

Net taxes are.

Question # 10

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 11

using money as a medium of exchange.

Question # 12

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

Question # 13

An example of nondiscretionary fiscal policy would be.

Question # 14

An autonomous increase in money demand.

Question # 15

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 # 16

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

Question # 17

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 18

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

Question # 19

According to classical models, the level of employment is determined primarily by

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.
A. Rs.1 billion
B. Rs.2 billion
C. Rs.0.9 billion
D. Rs.0.5 billion
2 An expansionary monetary policy
A. Reduces interest rates
B. Increases real output
C. Shifts the LM curve to the right
D. All of the above
3 A business cycle refers to.
A. Fluctuations in the general price level
B. changes in the long term growth pattern of the CPI
C. The ups and downs of real GDP
D. Fluctuations in the level of corporate.
4 An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate
A. right ; falls
B. right ; rises
C. left ; falls
D. left ; rises
5 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
6 If firms paying employees monthly began paying them weakly then the demand for money would.
A. Rise and income would rise
B. Rise and income would fall
C. Fall and income would rise
D. Fall and income would fall
7 Monetary policy is concerned with influencing.
A. The general level of money wages
B. The level of government expenditure
C. The price and availability of money
D. The level of shares on the stock market
8 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
9 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
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.
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right

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