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

In the Keynesian cross diagram a decline 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 # 2

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 3

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 # 4

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 5

If a perfectly competitive industry is in long run equilibrium all firms will

Question # 6

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Question # 7

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

Question # 8

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 9

If the central Bank wished to Tighten money is would.

Question # 10

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

Question # 11

If the demand for money increase relative to the supply of money

Question # 12

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

Question # 13

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

Question # 14

The purpose of fiscal policy is to

Question # 15

As the interest sensitivity of investment spending increase.

Question # 16

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.

Question # 17

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

Question # 18

When a government prints money to finance its expenditures it is likely to cause

Question # 19

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The equilibrium level of saving is.
A. Rs.120
B. Rs.75
C. Rs.40
D. Rs.80
2 Why would corporations want to achieve zero balances in their checking accounts.
A. To earn more interest
B. To avoid paying taxes
C. to keep a low profile
D. To circumvent banking regulations
3 A monetary action consistent with the central bank selling bonds in the open market would be.
A. An increase in the reserve ratio
B. A reduction in the discount rate of interest
C. An increase in government spending.
D. a reduction in excise taxes
4 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 _______
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right
5 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
6 The ratio of debt to GDP will be larger
A. The lower the real interest rate
B. The lower the growth rate of output
C. The lower the in initial debt ratio
D. The lower the ratio of the primary deficit to GDP
7 One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
8 An example of discretionary fiscal policy would be.
A. The operation of the welfare sate
B. The operation of the processive federal income tax
C. A tax cut adopted to stimulate consumption
D. An interest rate out in plummeted to stimulate consumption
9 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
10 Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.
A. Milton Friedman
B. Ronald Reagan
C. Margaret Thatcher
D. John Maynard Keynes

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