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

A 15% VAT is a.

Question # 2

Monetary policy is concerned with influencing.

Question # 3

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.

Question # 4

The ratio of debt to GDP will be larger

Question # 5

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

Question # 6

Disposable income is obtained by subtracting ________ taxes from personal income

Question # 7

Which of the following measures is the best measure of money as a medium of exchange.

Question # 8

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

Question # 9

Which of the following is not an important variable in growth accounting calculations.

Question # 10

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

Question # 11

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

Question # 12

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 13

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

Question # 14

In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.

Question # 15

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

Question # 16

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

Question # 17

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

Question # 18

Money or paper currency serves at least _______ functions.

Question # 19

The purpose of financial intermediaries is.

Question # 20

If the central Bank wished to Tighten money is would.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 As the interest sensitivity of investment spending increase.
A. Monetary policy has a larger effect on output
B. Fiscal policy has a larger effect on output
C. The multiplier increases
D. All of the above
2 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
3 The aggregate demand curve is downward sloping because a higher price level.
A. Makes people wealthier and so they spend more
B. Causes higher wages and so people spend more
C. Cuts the real value of income and so people spend less
D. Decreases the real supply of money decreasing spending.
4 A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.
A. decreases ; right
B. decreases ; fall
C. increases ; rise
D. increases ; fall
5 The limit of an economy's total productive capacity at any given time is set by
A. The amount of money in circulation
B. Business demand for goods and services
C. The level of government spending and taxation
D. the quantity and quality of its productive resources
6 The relation between M2 and inflation is tighter than the relation between M1 and inflation because.
A. M1 is larger than M2
B. The demand for M2 is more stable
C. M1 includes more liquid assets the M2
D. None of the above answers is correct.
7 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
8 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
9 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
10 In the Keynesian cross diagram, a decline in autonomous consumer 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

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