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

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

Question # 2

Identify the three motives of money demand.

Question # 3

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 4

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 5

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Question # 6

The quantity of money demanded varies.

Question # 7

An increase in expected inflation is likely ot cause.

Question # 8

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

Question # 9

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

Question # 10

The rate of which central bank lends to commercial banks is known as

Question # 11

The purpose of fiscal policy is to

Question # 12

As the interest sensitivity of money demand increases

Question # 13

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.

Question # 14

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 15

The ____ lag for fiscal policy is generally _____ than it is for monetary policy.

Question # 16

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 17

During period of inflation

Question # 18

Money or paper currency serves at least _______ functions.

Question # 19

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 20

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 fall and the IS curve to shift to the.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 The budget deficit tends to decrease when
A. GDP increases
B. GDP decreases rapidly
C. GDP remains unchanged
D. GDP decreases slightly
3 using money as a medium of exchange.
A. Requires people to math goods wanted with goods available.
B. Reduces the range of feasible exchanges in the economy
C. Inhibits economic transactions
D. Reduces the need for barter in the economy.
4 Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.
A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect is ambiguous
D. Money demand declines
5 A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.
A. Demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
6 If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.
A. Increase the minimum reserve asset ratio
B. Sell government securities on the open market
C. Buy government securities on the open market
D. Raise interest rates.
7 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
8 The parable of Riding a Switchback suggests that stabilizing policy.
A. Is not sufficiently stimulating or contra citing the economy at any time
B. Is desirable
C. Is effective
D. Is stimulating or contracting the economy at the wrong times.
9 In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up 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
10 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

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