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

00:00
Question # 1

As the required reserve ratio is decreased the money multiplier.

Question # 2

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 # 3

Believers in the monetarist rule assert that

Question # 4

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

Question # 5

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

Question # 6

A business cycle refers to.

Question # 7

"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.

Question # 8

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 # 9

There are ______ methods of measuring GDP

Question # 10

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 11

To move from point E to point E1 is consistent with.

Question # 12

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

Question # 13

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

Question # 14

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

Question # 15

an asset that can easily be exchanged for goods and services is called a.

Question # 16

"Far better for central bankers to get out of the fine tuning business instead they should d try to keep.

Question # 17

The purpose of fiscal policy is to

Question # 18

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 19

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 According to the supply side model a reduction in the tax rate.
A. Could reduce the size of any budget deficit
B. Would have no effect on output
C. Would have no effect on consumption
D. None of the above
2 An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports
A. Less ; decreases
B. Less ; increases
C. More ; decreases
D. more ; increases
3 If the Central Bank wanted to decrease the quantity of money held by the public it would.
A. Sell government securities
B. Buy government securities
C. Lower the legal reserve requirement
D. Raise taxes
4 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; rightward
B. IS ; rightwards
C. LM ; Leftward
D. IS ; Leftward
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 An autonomous increase in money demand.
A. Shift the IS curve to the right
B. Shifts the IS curve to the left
C. Shift the LM curve to the right
D. Shift the LM curve to the left
7 Fiscal policy refers to.
A. The actions of the central bank in controlling the money supply
B. The government's altitude to taxation
C. The spending and taxing policies used by the government to influence the economy
D. The governments regulation of financial intermediaries.
8 An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____
A. A movement along the AS curve cost push inflation
B. A leftward shift int he AS curve demand pull inflation.
C. A right ward shift in the AS Curve cost push inflation
D. a left ward shift in the AS curve cost push inflation
9 If the demand for money increase relative to the supply of money
A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
10 Which of the following causes M1 demand is decrease.
A. A fall in the tax rate
B. An increase in income
C. A fall in the interest rate
D. An increase in the use of credit cards

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