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 situation in which the imports are greater than exports is termed as.

Question # 2

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 3

A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

Question # 4

The quantity of money demanded varies

Question # 5

The board pumps money out of the economy by

Question # 6

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

Question # 7

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.

Question # 8

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Question # 9

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 10

Short run contractionary Fiscal policy would result in.

Question # 11

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

Question # 12

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 13

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 14

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

Question # 15

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 16

Money and income are.

Question # 17

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

Question # 18

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

Question # 19

The main role of the Federal Reserve is to

Question # 20

As the interest sensitivity of investment spending increase.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.
A. Less ; higher ; output.
B. more ; higher ; output
C. less ; lower ; unplanned investment
D. more ; lower ; unplanned investment
2 Large difference is inflation rates among countries are almost always the result of large difference in.
A. Productivity
B. Real income growth
C. The growth rates of real money demand
D. The growth rates of nominal money supplies
3 In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.
A. fiscal ; expansionary
B. fiscal ; contractionary
C. monetary ; expansionary
D. monetary ; contractionary
4 How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.
A. Rs.3.5 billion
B. Rs.1.5 billion
C. Rs. 4.9 billion
D. Rs.2.8 billion
5 The ____ lag for fiscal policy is generally _____ than it is for monetary policy.
A. Recognition ; shorter
B. Recognition ; longer
C. Implementation ; shorter
D. Implementation ; longer
6 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
7 A major advantage of monetary over fiscal policy is that monetary policy
A. Can be put into effect more quickly
B. Affects all sectors of the economy equally
C. Authorities are quicker to see the need for policy
D. Has a more direct and predictable impact on spending.
8 If the central bank prints more 10 billion and spends them then as a direct result of this action.
A. M1 and M2 both increases
B. Neighed M1 nor M2 increase
C. M1 increase but M2 does not
D. M2 increased but M1 does not.
9 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
10 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right

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