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

Try The 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

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 2

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 3

If the central Bank wished to Tighten money is would.

Question # 4

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

Question # 5

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 6

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

Question # 7

When considering any kind of economics indicator, prices are important because.

Question # 8

Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.

Question # 9

According to the Laffer curve as tax rates increase tax revenues.

Question # 10

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

Question # 11

Short run contractionary Fiscal policy would result in.

Question # 12

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

Question # 13

What's the most common way for a central bank to reduce the money supply.

Question # 14

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

Question # 15

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

Question # 16

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

Question # 17

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

Question # 18

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 # 19

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 # 20

The main source of interest profits for banks is.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 What is the significance of underestimating transactions money.
A. Monetary policy will be over simulating the economy
B. Monetary policy will be putting a drag on the economy
C. there is a need for money that the central bank should be meating.
D. The economy has too much money and there frore not enough spending.
2 Which of the following would qualify as an aggregate demand shocks.
A. An unexpected increase in oil prices
B. A seasonally expected increase in oil prices
C. An unexpected reduction in consumer confidence
D. an anticipated tax cut
3 A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.
A. Raises ; LM; Right
B. Lowers; IS ; left
C. raises ; IS; right
D. Lower ; LM; left
4 A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the
A. decreases ; right
B. decrease ; left
C. increase ; right
D. increases ; left
5 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
6 in The Liquidity trap region
A. Fiscal policy is not effective
B. Monetary policy is completely ineffective
C. Monetary policy is completely effective
D. Fiscal policy and monetary policy are equally effective
7 An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.
A. Cheaper ; decline
B. Cheaper ; rise
C. dearer ; decline
D. dearer ; rise
8 "Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.
A. Income growth
B. Unemployment
C. Money growth
D. Taxes
9 Under system fixed exchange rates which of the following policies promotes internal balance for a nation.
A. Fiscal policy
B. Monetary policy
C. Both fiscal policy and monetary policy
D. Neither fiscal policy nor monetary policy
10 An expansionary monetary policy
A. Reduces interest rates
B. Increases real output
C. Shifts the LM curve to the right
D. All of the above

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