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

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Question # 1

A monetary expansion is characterized by

Question # 2

The IS curve shifts to the left when

Question # 3

A state of government bonds by the central bank should cause

Question # 4

Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if

Question # 5

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.

Question # 6

As the required reserve ratio is decreased the money multiplier.

Question # 7

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 # 8

"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.

Question # 9

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

Question # 10

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 11

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

Question # 12

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

Question # 13

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

Question # 14

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 # 15

As the interest sensitivity of investment spending increase.

Question # 16

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

Question # 17

There are ______ methods of measuring GDP

Question # 18

The limit of an economy's total productive capacity at any given time is set by

Question # 19

What happens to the money supply if the deficit is financed by selling bonds to the central bank.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The investment demand curve shows the relationship between the levels of.
A. Investment and consumption
B. Consumption and Interest rate
C. Investment and interest rate
D. None
2 The largest source of tax revenue for the federal government is.
A. The personal income tax
B. The social security tax
C. The property tax
D. The sales tax
3 An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
4 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias
5 What's the most common way for a central bank to reduce the money supply.
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bounds from the government
D. Buy bonds from the public
6 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
7 A 15% VAT is a.
A. Proportional income tax
B. Fixed excise duty
C. Ad valorem indirect tax
D. None of the above
8 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
9 Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.
A. Money demand rises proportionately to the rise in wealth.
B. Money demand rises, but less than proportionately to the rise in wealth.
C. The overall effect in ambiguous
D. Money demand declines
10 The board pumps money out of the economy by
A. Buying bonds
B. Selling bond
C. Creating cash
D. Lowering the reserve requirements.

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