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

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

Question # 2

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 3

Why would corporations want to achieve zero balances in their checking accounts.

Question # 4

There are ______ methods of measuring GDP

Question # 5

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

Question # 6

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

Question # 7

Employment tends to _______ whwn aggregate output.

Question # 8

The main role of the Federal Reserve is to

Question # 9

"Transactions" money is money used as a

Question # 10

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

Question # 11

Commercial banks

Question # 12

Intermediate goods are meant for

Question # 13

Identify the three motives of money demand.

Question # 14

The intersection of the IS and LM curves captures.

Question # 15

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 16

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 # 17

A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.

Question # 18

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 19

Per Capita income is obtained by dividing National income by

Question # 20

a contractionary monetary policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 When a government prints money to finance its expenditures it is likely to cause
A. Unemployment
B. Inflation
C. Deflation
D. Reductions in the use of barter
3 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise
A. demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
4 Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.
A. Reduce a balance of payments surplus
B. Reduce a balance of payments deficit
C. Increases both imports and exports
D. Decrease both imports and exports
5 An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
6 The equilibrium level of saving is.
A. Rs.120
B. Rs.75
C. Rs.40
D. Rs.80
7 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
8 Those who favor setting the target rate of inflation at about 3% believe.
A. The cost of moderate inflation can be minimized by indexing the tax system and bonds
B. that the cost of going to 0% is very low
C. That moderate inflation increases money illusion
D. Believe that moderate inflation aggravates the time inconsistency problem
9 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
10 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

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