PPSC Economics Topic 4 Monetary & Fiscal Policy

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

In economics money refers to

Income A
Wealth B
Assets use and accepted an payment C
Currency D

Question # 2

The IS curve shifts to the left when

Taxes increase A
Government spending increase B
The money supply increases C
All of the above occur D

Question # 3

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _ and the IS curve to shift to the _

rise ; left A
rise ; right B
fall ; left C
fall ; right D

Question # 4

The money multiple tells us teh ultimate increase in.

The income level due to an increase in the money base A
The money supply due to an increase in the money base. B
The money supply due to an increase in the income level C
The income level due to an increase in the money supply D

Question # 5

If the central Bank wished to Tighten money is would.

Lower the discount rate A
Sell government securities B
Lower the legal reserve ratio C
Lower the tax rate D

Question # 6

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

up ; rise A
up ; fall B
down ; rise C
down ; fall D

Question # 7

Tax incidence is the

Ultimate distribution of a tax's burden A
Measure of the inpat the tax has on employment and output B
Behavior of shifting the tax to another party
C
Structure of the tax D

Question # 8

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

The multiplier A
The money multiplier B
Required reserve ratio C
Open market operations D

Question # 9

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

decreases ; rise A
decreases ; fall B
increases ; rise C
increases ; fall D

Question # 10

Which of the following would qualify as an aggregate supply shock.

An unexpected increase in oil prices A
Seasonally expected increase in oil prices B
An unexpected reduction in consumer confidence C
an anticipated tax cut D

Question # 11

The main role of the Federal Reserve is to

Administer the government on the state of the economy A
Overses the operations of the financial system and monetary management. B
Establish the value of the dollar and official interest rates C
Provide advice to the government on the state of the economy. D

Question # 12

The aggregate demand curve is downward sloping because a higher price level.

Makes people wealthier and so they spend more A
Causes higher wages and so people spend more B
Cuts the real value of income and so people spend less C
Decreases the real supply of money decreasing spending. D

Question # 13

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

rise ; rise A
rise ; fall B
fall ; rise C
fall ; fall D

Question # 14

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

Can be put into effect more quickly A
Affects all sectors of the economy equally B
Authorities are quicker to see the need for policy C
Has a more direct and predictable impact on spending. D

Question # 15

"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.

Lower interest rates A
Lower money supply B
Lower unemployment C
Higher inflation D

Question # 16

The quantity of money demanded varies.

Directly with both prices and output A
Inversely with both prices and output B
Directly with prices and inversely with output C
Inversely with prices and directly with output D

Question # 17

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Upward A
Down ward B
To be zero C
To match inflation D

Question # 18

Weighted monetary aggregates

Ignore the fact that some assets are more money like than others. A
Are constructed by simply adding up the outstanding amounts of various types of asssets B
Give greater weight to currency than to savings deposits C
Value coins more than currency. D

Question # 19

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

Stimulate the economy and increase empolyment. A
Result in additional recessionary declines in employment and income B
Stimulator defiance spending C
Have an automatic stabilizing impact upon the economy D

Question # 20

The intersection of the IS and LM curves captures.

The equilibrium of the demand and supply sides of the economy A
the equivalence of monetary and fiscal policy B
Joint equilibrium in the goods and money markets C
All of the above D

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

In economics money refers to

The IS curve shifts to the left when

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

The money multiple tells us teh ultimate increase in.

If the central Bank wished to Tighten money is would.

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

Tax incidence is the

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

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

Which of the following would qualify as an aggregate supply shock.

The main role of the Federal Reserve is to

The aggregate demand curve is downward sloping because a higher price level.

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

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

"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.

The quantity of money demanded varies.

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Weighted monetary aggregates

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

The intersection of the IS and LM curves captures.

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In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _ and the IS curve to shift to the _