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 increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 2

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

Question # 3

Employment tends to _______ whwn aggregate output.

Question # 4

The ____ lag for fiscal policy is generally _____ than it is for monetary policy.

Question # 5

A sale of bonds by the central bank should cause.

Question # 6

Believers in the monetarist rule assert that

Question # 7

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 # 8

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 9

The limit of an economy's total productive capacity at any given time is set by

Question # 10

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

Question # 11

The main role of the Federal Reserve is to

Question # 12

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 13

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

Question # 14

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

Question # 15

Money is

Question # 16

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 # 17

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

Question # 18

What's the most common way for a central bank to reduce the money supply.

Question # 19

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 20

" 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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
2 What's the most common way for a central bank to reduce the money supply.
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bounds from the government
D. Buy bonds from the public
3 In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.
A. rise ; rise
B. rise; fall
C. fall ; rise
D. fall ; fall
4 An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____
A. A movement along the AS curve cost push inflation
B. A leftward shift int he AS curve demand pull inflation.
C. A right ward shift in the AS Curve cost push inflation
D. a left ward shift in the AS curve cost push inflation
5 When your grandmother keeps her savings hidden under her mattress she is using money as.
A. a standard of deferred panyment
B. A comfortable thing for sleeping
C. A medium of exchange
D. A store of value
6 During period of inflation
A. Those people who have fixed incomes benefit
B. Every one's real income falls
C. those people who enter long term wage agreements benefit
D. Those people whose real income rises faster than the general price level benefit
7 The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.
A. To eliminate seignior age
B. To allow open market operations
C. To enhance the credibility of monetary policy.
D. None of the above
8 Which of the following is not an important variable in growth accounting calculations.
A. Productivity growth
B. Money supply growth
C. Labor growth
D. Capital growth
9 The main source of interest profits for banks is.
A. Checking account fees
B. Loans
C. Government securities
D. Savigng accounts
10 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

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