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

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PPSC Economics Topic 4 Monetary & Fiscal Policy

00:00
Question # 1

How do the banks gain from this corporate behavior.

Question # 2

The opportunity cost of holding currency decreases when.

Question # 3

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 4

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

Question # 5

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

Question # 6

Which of the following persons would be considered unemployed.

Question # 7

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

Question # 8

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 9

The equilibrium level of income is.

Question # 10

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Question # 11

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

Question # 12

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 13

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 14

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

Question # 15

The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.

Question # 16

The budget deficit tends to decrease when

Question # 17

The IMF is an agency charged with providing.

Question # 18

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

Question # 19

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 20

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Factors that cause the IS curve to shift include.
A. Changes in autonomous consumer spending
B. Changes in government spending
C. Changes in investment spending related to business confidence
D. All of the above
2 If the central Bank wished to Tighten money is would.
A. Lower the discount rate
B. Sell government securities
C. Lower the legal reserve ratio
D. Lower the tax rate
3 A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.
A. Raises ; LM; Right
B. Lowers; IS ; left
C. raises ; IS; right
D. Lower ; LM; left
4 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
5 What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
6 What major advantage of monetary policy over fiscal policy does this clipping underline.
A. Monetary policy is more effective
B. Monetary policy is lss discriminatory
C. Monetary policy can influence interest rates
D. Monetary policy can be undertaken more quickly
7 A good that is used as a medium of exchange as well as being a consumption good is called.
A. A barter money
B. A commodity money
C. A legal tender
D. A debased money
8 A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.
A. Reduce
B. Increase
C. Have no effect on
D. Double
9 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 rise and the IS curve to shift to the
A. up ; right
B. up ; left
C. down ;left
D. down ; right
10 In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to
A. increase ; increase
B. Increase ; decrease
C. decrease ; decrease
D. decrease ; increase

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