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

Total utility of a commodity is measured by which price of that commodity.

Question # 2

How do the banks gain from this corporate behavior.

Question # 3

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 4

The budget deficit tends to decrease when

Question # 5

By controlling the monetary base economists mean

Question # 6

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

Question # 7

The situation in which the imports are greater than exports is termed as.

Question # 8

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

Question # 9

Which of the followig does not shift the IS curve .

Question # 10

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

Question # 11

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 12

Those who favor setting the target rate of inflation at about 3% believe.

Question # 13

" A growing number of economists view the Fed's new willingness to take on more of the nation's debt as inflationary in the long run." This inflation worry is because.

Question # 14

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

Question # 15

Monetary policy is concerned with influencing.

Question # 16

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 17

Money and income are.

Question # 18

According to the supply side model a reduction in the tax rate.

Question # 19

Automatic stabilizers

Question # 20

There are ______ methods of measuring GDP

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 According to Marshall the basis of consumer surplus is.
A. Law of diminishing marginal utility.
B. Law of equal marginal utility
C. Law of proportions
D. All of the above
2 The rate of which central bank lends to commercial banks is known as
A. reserve rate
B. Discount rate
C. Open market operation
D. None
3 A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.
A. Demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
4 Money is
A. An indicator of the scarcity of wants
B. Anything that sellers accept i exchange for goods and services.
C. A form of barter
D. Anything that the government classifies as a trade commodity.
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 The function of money do not include.
A. an exchange of purchasing power
B. A unit of account
C. A medium of exchange
D. A store of value
7 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
8 Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when
A. k increases and h increase
B. k increases and h decrease
C. k decrease and h increase
D. k decrease and h decrease
9 If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.
A. Increase the minimum reserve asset ratio
B. Sell government securities on the open market
C. Buy government securities on the open market
D. Raise interest rates.
10 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

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