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

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

Question # 2

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

Question # 3

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 # 4

The intersection of the IS and LM curves captures.

Question # 5

The situation in which the imports are greater than exports is termed as.

Question # 6

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 7

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

Question # 8

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

Question # 9

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Question # 10

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

Question # 11

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.

Question # 12

In economics money refers to

Question # 13

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

Question # 14

An expansionary monetary policy

Question # 15

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 16

Net taxes are.

Question # 17

The board pumps money out of the economy by

Question # 18

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 19

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

Question # 20

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A checking deposit held at a commercial bank is considered ______ of that bank.
A. An asset
B. Net worth
C. a liability
D. Capital
2 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
3 If the original money supply is MSo and the original demand for money is MDo then
A. The equilibrium interest rate and savings are 5% and 50
B. The money supply is 200 and equilibrium income is 500
C. The equilibrium interest rate and income are 5% and 600
D. The speculative demand is 25
4 An increase in the money supply other thighs equal shifts the ______ curve to the
A. IS ; right
B. Is ; left
C. LM ; Left
D. LM ; right
5 When there is no change in central banking holding of international reserve balances a country's
A. Trae balance always equals 0
B. Current account balance always equals 0
C. Capital account balance always equals 0
D. Balance of payments always equal 0
6 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
A. The IS curve shifts left ward
B. The IS curve shifts right ward
C. The money supply increase
D. Taxes are cut
7 using money as a medium of exchange.
A. Requires people to math goods wanted with goods available.
B. Reduces the range of feasible exchanges in the economy
C. Inhibits economic transactions
D. Reduces the need for barter in the economy.
8 A sale of bonds by the central bank should cause.
A. A fall in the interest rate
B. An increase in the money supply
C. A decrease in the reserves of the commercial banks
D. An increase in the commercial banks loans to the public
9 When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.
A. Increase ; right ; fall; increase
B. increases ; left ; rise ; decrease
C. decreases ; left ;rise ; increases
D. decreases ; left ; fall ; increases
10 When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.
A. Is unchaged
B. Increase by Rs.100,000
C. Increases by Rs. 1,000,000
D. None of these

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