PPSC Economics Topic 4 Monetary & Fiscal Policy

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

If the Federal reserve conducts open market the money supply shifting LM curve to the left.

Purchases ; decreases A
sales ; decreases B
purchases ; increases C
sales ; increases D

Question # 2

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

A barter money A
A commodity money B
A legal tender C
A debased money D

Question # 3

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

right ; fall A
right ; rises B
left ; falls C
left ; rises D

Question # 4

According to the Laffer curve as tax rates increase tax revenues.

Decrease continuously. A
Initially decrease and then increase B
Rise continuously C
Initially increase and then decrease D

Question # 5

"Transactions" money is money used as a

Store of value A
Unit of account B
Medium of exchange C
Standard of deferred payment D

Question # 6

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

more ; iincreases A
less ; increases B
more ; decreases C
more ; increases D

Question # 7

Which of the following would qualify as an aggregate supply shock.

An unexpected increase in oil prices A
Seasonally expected increase in oil prices B
An unexpected reduction in consumer confidence C
an anticipated tax cut D

Question # 8

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

If you live in a 1st best world. A
If you live in a 2nd best world B
If the tax rates on some of the items are prohibitively high C
Either of the above D

Question # 9

an asset that can easily be exchanged for goods and services is called a.

Financial asset A
Barter like asset B
Illegitimate asset C
Liquid asset D

Question # 10

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

Can be put into effect more quickly A
Affects all sectors of the economy equally B
Authorities are quicker to see the need for policy C
Has a more direct and predictable impact on spending. D

Question # 11

Which of the following causes M1 demand is decrease.

A fall in the tax rate A
An increase in income B
A fall in the interest rate C
An increase in the use of credit cards D

Question # 12

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

An increase in the reserve ratio A
A reduction in the discount rate of interest B
An increase in government spending. C
a reduction in excise taxes D

Question # 13

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

decreases ; right A
decrease ; left B
increase ; right C
increases ; left D

Question # 14

Which of the following events will lead to a decrease in the demand for money.

An increase in the level of aggregate output. A
A decrease in the supply of money B
A decrease in the interest rate C
a decrease in the price level D

Question # 15

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

decreases ; rise A
decreases ; fall B
Increases ; rise C
Increase ; fall D

Question # 16

The quantity of money demanded varies.

Directly with both prices and output A
Inversely with both prices and output B
Directly with prices and inversely with output C
Inversely with prices and directly with output D

Question # 17

Factors that cause the IS curve to shift include.

Changes in autonomous consumer spending A
Changes in government spending B
Changes in investment spending related to business confidence C
All of the above D

Question # 18

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

A relative large increase in Y, a smaller increate n P A
A relative large increase in P, a smaller increase in Y B
Both Y and P increasing with an percentage C
Only Y increase D

Question # 19

An autonomous increase in the value of the domestic exchange rate.

Increases output net exports and the interest rate. A
Decreases output net exports and the interest rate B
Decreases output and net exports and increases the interest rate. C
Increase output and decreases net exports and the interest rate. D

Question # 20

"Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.

The multiplier A
The money multiplier B
Required reserve ratio C
Open market operations D

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

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

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

According to the Laffer curve as tax rates increase tax revenues.

"Transactions" money is money used as a

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

Which of the following would qualify as an aggregate supply shock.

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

an asset that can easily be exchanged for goods and services is called a.

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

Which of the following causes M1 demand is decrease.

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

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Which of the following events will lead to a decrease in the demand for money.

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

The quantity of money demanded varies.

Factors that cause the IS curve to shift include.

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

An autonomous increase in the value of the domestic exchange rate.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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If the Federal reserve conducts open market the money supply shifting LM curve to the left.

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

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