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

According to Marshall the basis of consumer surplus is.

Question # 2

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

Question # 3

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 # 4

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 5

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

Question # 6

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

Question # 7

Fiscal policy refers to.

Question # 8

Which of the following part of M1

Question # 9

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 10

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

Question # 11

If the central Bank wished to Tighten money is would.

Question # 12

in The Liquidity trap region

Question # 13

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

Question # 14

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Question # 15

Credit constitutes.

Question # 16

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

Question # 17

The largest source of tax revenue for the federal government is.

Question # 18

Money and income are.

Question # 19

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

Question # 20

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 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
A. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right
3 The rate of which central bank lends to commercial banks is known as
A. reserve rate
B. Discount rate
C. Open market operation
D. None
4 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
5 Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.
A. Store of value
B. Medium of exchange
C. Standard of deferred payment
D. Unit of account
6 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
7 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
8 Which of the following part of M1
A. Stock negotiating accounts
B. Automatic transfer system accounts
C. Negotiable orders of withdrawal accounts
D. Demand deposits of mutual saving banks.
9 The central bank and the government are working against each other if as the government cuts taxes the central bank
A. Sells government bonds
B. Lowers the discount rate
C. Increase the money supply
D. Decrease the legal reserve requirements
10 An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right

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