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

Short run contractionary Fiscal policy would result in.

Question # 2

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Question # 3

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 4

The quantity of money demanded varies

Question # 5

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 # 6

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

Question # 7

If a perfectly competitive industry is in long run equilibrium all firms will

Question # 8

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

Question # 9

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 10

The quantity of money demanded varies.

Question # 11

A major advantage of monetary over fiscal policy is that monetary policty.

Question # 12

As the required reserve ratio is decreased the money multiplier.

Question # 13

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

Question # 14

How do the banks gain from this corporate behavior.

Question # 15

A business cycle refers to.

Question # 16

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 17

The ratio of debt to GDP will be larger

Question # 18

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 # 19

The opportunity cost of holding currency decrease when

Question # 20

The purpose of fiscal policy is to

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.
A. Bank's line of credit
B. Reserve ratio
C. Current ratio
D. Money multipiler
3 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
4 A decrease 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
5 The Central Bank controls money and credit with the exception of.
A. Controlling the money base through open market operations
B. Controlling reserve requirements
C. Setting the discount rate of interest
D. controlling the stock market
6 Intermediate goods are meant for
A. Direct use by the consumers
B. Further processing
C. The term do not exist
D. None
7 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
8 "Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
9 Fiscal policy is purposeful movements in _____designed to direct an economy
A. Interest rate
B. Legal structures
C. Government regulations
D. D Government spending and taxes
10 Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.
A. Positively ; positively
B. Positively ; negatively
C. negatively ; positively
D. negatively ; negatively

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