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

Disposable income is obtained by subtracting ________ taxes from personal income

Question # 2

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 ______ and the equilibrium level of aggregate output to ______

Question # 3

The intersection of the IS and LM curves captures.

Question # 4

If the central Bank wished to Tighten money is would.

Question # 5

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

Question # 6

The IMF is an agency charged with providing.

Question # 7

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 8

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 9

By controlling the monetary base economists mean

Question # 10

The main source of interest profits for banks is.

Question # 11

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

Question # 12

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

Question # 13

The opportunity cost of holding currency decreases when.

Question # 14

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

Question # 15

In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.

Question # 16

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

Question # 17

An item designed as money that is intrinsically worthless could the.

Question # 18

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

Question # 19

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 20

If the State bank of Pakistan wished to pursue a light monetary policy it would.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.
A. Demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
2 Credit constitutes.
A. Saving made available to borrowers
B. A form of liquid asset
C. bank loans converted into commodity money
D. Money used as a standard of deferred payment.
3 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
4 If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.
A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect its ambiguous
D. Money demand declines
5 One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
6 When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.
A. 0.25
B. 4
C. 0.4
D. Rs.4 billion
7 The near term effect of an unexpected sale of bonds by the central bank is.
A. An increase in interest rates, a risen investment and a rise in GDP
B. An increase in interest rates a drop in investment and a drop in GDP
C. A decrease in interest rtes a rise in investment and a rise in GDP
D. A decrease in interesr rates a drop in investment and a drop in GDP
8 An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.
A. Cheaper ; decline
B. Cheaper ; rise
C. dearer ; decline
D. dearer ; rise
9 The ratio of debt to GDP will be larger
A. The lower the real interest rate
B. The lower the growth rate of output
C. The lower the in initial debt ratio
D. The lower the ratio of the primary deficit to GDP
10 Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when
A. k increases and h increase
B. k increases and h decrease
C. k decrease and h increase
D. k decrease and h decrease

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