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

A decrease in the legal reserve ratio from 25% to 20% will

Question # 2

Automatic stabilizers

Question # 3

An example of discretionary fiscal policy would be.

Question # 4

When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.

Question # 5

Identify the three motives of money demand.

Question # 6

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

Question # 7

using money as a medium of exchange.

Question # 8

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

Question # 9

A monetary expansion is characterized by

Question # 10

If the State bank of Pakistan wished to pursue a light monetary policy it would.

Question # 11

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

Question # 12

Tax incidence is the

Question # 13

Per Capita income is obtained by dividing National income by

Question # 14

Which of the following events will lead to a decrease in the demand for money.

Question # 15

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 # 16

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 17

A business cycle refers to.

Question # 18

When your grandmother keeps her savings hidden under her mattress she is using money as.

Question # 19

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 # 20

A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
2 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
3 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
4 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias
5 A decrease in fully autonomous investment other things equal shifts the ______ curve to the
A. IS ; right
B. IS ; Left
C. LM ; Left
D. LM ; right
6 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls
7 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
8 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
9 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 _______
A. rise; Lm ; RIGHT
B. RISE ; is; right
C. fall ; IS; Left
D. rise ; LM; left
10 A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.
A. Increases ; increases ; right
B. Increases ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; right

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