PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	A decrease in the legal reserve ratio from 25% to 20% will	A. Result in light money B. Be contractionary C. Increases excess reserves and the potential money multiplier D. Decrease excess reserves and the potential money multiplier
2	In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.	A. A relative large increase in Y, a smaller increate n P B. A relative large increase in P, a smaller increase in Y C. Both Y and P increasing with an percentage D. Only Y increase
3	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
4	Which of the following persons would be considered unemployed.	A. a house wife B. A person who worked more than 20 hours in a family owned business C. A 15 years old looking for summer employment D. A recent college graduate looking for her fist job
5	Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.	A. Increase G by Rs.1,000 B. Decrease G by Rs.250 C. Increase G by less than Rs.100 D. Decrease G by more than Rs.250 but less than Rs.1000
6	The budget deficit tends to decrease when	A. GDP increases B. GDP decreases rapidly C. GDP remains unchanged D. GDP decreases slightly
7	An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate	A. right ; falls B. right ; rises C. left ; falls D. left ; rises
8	Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.	A. Low ; smaller ; high B. Low ; larger ; high C. low ; smaller ; middle D. High ; larger ; low
9	If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.	A. Purchases ; decreases B. sales ; increases C. purchases ; increases D. sales ; decreases
10	Knowledge of the money supply can lead to good predications of nominal GDP only	A. If the price level is stable B. If the money supply is stable C. Over very short periods of time D. If the determinants of velocity are known

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

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

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

If firms paying employees monthly began paying them weakly then the demand for money would.

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

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

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.

The opportunity cost of holding currency decrease when

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

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

An increase in the money supply other thighs equal shifts the ______ curve to the

A sale of bonds by the central bank should cause.

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

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

In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.

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

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.

Weighted monetary aggregates

An example of nondiscretionary fiscal policy would be.

The use of money is more efficient than barter because the introduction of money

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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

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An autonomous rise in the value of the Rupee makes Pakistan goods _ expensive relative to foresight goods which __ net exports

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _the equilibrium level of aggregate output to __l and the IS curve Curve to shift to the.