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

The equilibrium level of saving is.

Question # 2

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

Question # 3

An autonomous increase in money demand.

Question # 4

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 5

The IS curve shifts to the left when

Question # 6

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

Question # 7

Factors that cause the IS curve to shift include.

Question # 8

The implementation lag for monetary policy is generally

Question # 9

The Central Bank controls money and credit with the exception of.

Question # 10

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

Question # 11

The intersection of the IS and LM curves captures.

Question # 12

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

Question # 13

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 14

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

Question # 15

Monetary policy can affect output.

Question # 16

Weighted monetary aggregates

Question # 17

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

Question # 18

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Question # 19

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

Question # 20

The main role of the Federal Reserve is to

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Factors that cause the IS curve to shift include.
A. Changes in autonomous consumer spending
B. Changes in government spending
C. Changes in investment spending related to business confidence
D. All of the above
2 "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
3 An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
4 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
5 How do the banks gain from this corporate behavior.
A. More loans can be made
B. Tax free profits can be made
C. Interest rates can be increased
D. By circumvent banking regulations
6 In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to
A. Increase ; increase
B. Increase ; decrease
C. decrees ; decrease
D. decrease ;Increase
7 Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
8 The situation in which the imports are greater than exports is termed as.
A. Trade surplus
B. Trade deficit
C. Budget surplus
D. None
9 An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
10 Time lags which often erode effectiveness of monetary and fiscal policy measures represent.
A. The change in export and import price.
B. Delays in the response of the economy to stabilization policy.
C. The foreign response to price changes
D. The change in exchang erates

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