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

Net taxes are.

Question # 2

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 3

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 4

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

Question # 5

"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.

Question # 6

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 7

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

Question # 8

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 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

Question # 10

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 # 11

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 12

Automatic stabilizers

Question # 13

Those who favor setting the target rate of inflation at about 3% believe.

Question # 14

The quantity of money demanded varies

Question # 15

When considering any kind of economics indicator, prices are important because.

Question # 16

Short run contractionary Fiscal policy would result in.

Question # 17

The implementation lag for monetary policy is generally

Question # 18

Fiscal policy refers to.

Question # 19

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A monetary action consistent with the central bank selling bonds in the open market would be.
A. An increase in the reserve ratio
B. A reduction in the discount rate of interest
C. An increase in government spending.
D. a reduction in excise taxes
2 A 15% VAT is a.
A. Proportional income tax
B. Fixed excise duty
C. Ad valorem indirect tax
D. None of the above
3 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
4 The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.
A. Milton Friedman
B. Ronald reagan
C. Margaret Thatcher
D. John Maynard Keynes
5 Fiscal policy refers to.
A. The actions of the central bank in controlling the money supply
B. The government's altitude to taxation
C. The spending and taxing policies used by the government to influence the economy
D. The governments regulation of financial intermediaries.
6 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
7 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
8 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
9 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
10 As the interest sensitivity of investment spending increase.
A. Monetary policy has a larger effect on output
B. Fiscal policy has a larger effect on output
C. The multiplier increases
D. All of the above

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