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

  • Total Questions20

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PPSC Economics Topic 4 Monetary & Fiscal Policy

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Question # 1

An autonomous increase in the value of the domestic exchange rate.

Question # 2

As the required reserve ratio is decreased the money multiplier.

Question # 3

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 4

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 5

During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.

Question # 6

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

Question # 7

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 8

"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 # 9

When a government prints money to finance its expenditures it is likely to cause

Question # 10

When your grandmother keeps her savings hidden under her mattress she is using money as.

Question # 11

Those who favor setting the target rate of inflation at about 3% believe.

Question # 12

An increase in expected inflation is likely ot cause.

Question # 13

A decrease in the legal reserve ratio from 25% to 20% will

Question # 14

A 15% VAT is a.

Question # 15

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 16

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Question # 17

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

Question # 18

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 19

You move some of your savings account balance into your checking account.

Question # 20

What's the most common way for a central bank to reduce the money supply.

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Sr.# Question Answer
1 in The Liquidity trap region
A. Fiscal policy is not effective
B. Monetary policy is completely ineffective
C. Monetary policy is completely effective
D. Fiscal policy and monetary policy are equally effective
2 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
3 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
4 A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.
A. fall ;LM; right
B. fall ;IS; Left
C. fall ;LM; Left
D. rise ;LM; Rifht
5 When your grandmother keeps her savings hidden under her mattress she is using money as.
A. a standard of deferred panyment
B. A comfortable thing for sleeping
C. A medium of exchange
D. A store of value
6 The real money demand doubles while the nominal money supply is unchanged what happens to the price level.
A. The price level increase by a factor of four
B. The price level doubles
C. The price level is unchanged
D. The price level falls by one half.
7 Which of the following persons would be considered unemployed.
A. a house wife
B. A person who worked more than 20 hours in a family owned business
C. A 15 years old looking for summer employment
D. A recent college graduate looking for her fist job
8 Fiscal policy refers to the manipulation of government income and expenditure to.
A. control the volume and price of money
B. Limit the rate of increaes in incomes
C. Effect the value of the dollar on world financial market.
D. Affect the level of total expenditure output and employment
9 The money multiple tells us teh ultimate increase in.
A. The income level due to an increase in the money base
B. The money supply due to an increase in the money base.
C. The money supply due to an increase in the income level
D. The income level due to an increase in the money supply
10 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

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