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

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Question # 2

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

Question # 3

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

Question # 4

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

Question # 5

The quantity of money demanded varies.

Question # 6

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 7

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

Question # 8

In the Keynesian corss diagram, and cline 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 # 9

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 10

The equilibrium level of saving is.

Question # 11

The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.

Question # 12

In economics money refers to

Question # 13

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 # 14

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

Question # 15

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 16

A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.

Question # 17

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 18

Why would corporations want to achieve zero balances in their checking accounts.

Question # 19

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 20

By controlling the monetary base economists mean

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
2 The IS curve shifts to the left when
A. Taxes increase
B. Government spending increase
C. The money supply increases
D. All of the above occur
3 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
4 In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.
A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
5 Factor that cause the IS curve to shift include.
A. Change in autocoups consumer spending
B. Change in taxes
C. Change in government spending
D. All of the above
6 "Far better for central bankers to get out of the fine tuning business instead they should d try to keep.
A. Taxes low
B. Budgets balanced
C. Money growth low
D. Government spending in check
7 The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.
A. Milton Friedman
B. Ronald reagan
C. Margaret Thatcher
D. John Maynard Keynes
8 Fiscal policy is purposeful movements in _____designed to direct an economy
A. Interest rate
B. Legal structures
C. Government regulations
D. D Government spending and taxes
9 A monetary expansion is characterized by
A. Rising output and interest rates
B. Rising output and falling interest rates.
C. Constant output and falling interest rates
D. Falling output and interest rates
10 Which of the following measures is the best measure of money as a medium of exchange.
A. M1
B. M2
C. M3
D. None of the above

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