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

  • Total Questions20

  • Time Allowed20

Start Test Download PDF

PPSC Economics Topic 4 Monetary & Fiscal Policy

00:00
Question # 1

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Question # 2

A monetary expansion is characterized by

Question # 3

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

Question # 4

Tax incidence is the

Question # 5

If the demand for money increase relative to the supply of money

Question # 6

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 # 7

in The Liquidity trap region

Question # 8

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

Question # 9

You move some of your savings account balance into your checking account.

Question # 10

The quantity of money demanded varies

Question # 11

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

Question # 12

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

Question # 13

How do the banks gain from this corporate behavior.

Question # 14

Short run contractionary Fiscal policy would result in.

Question # 15

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

Question # 16

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

Question # 17

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 18

A change in the money supply has a greater effect upon equilibrium income.

Question # 19

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

Question # 20

Why would corporations want to achieve zero balances in their checking accounts.

Submit

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers


Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

  • S
    Shiza Amir 25 - May - 2022 02 Min 08 Sec 18/20
  • K
    khurram shazzz 02 - Mar - 2022 04 Min 47 Sec 18/20
  • S
    Shahida 01 - Sep - 2021 06 Min 25 Sec 17/20
  • A
    Ayesha siddiqa 02 - Jul - 2021 19 Min 10 Sec 17/20
  • T
    Tayyeba 29 - Jun - 2021 09 Min 28 Sec 16/20
  • F
    Funny world with amazing facts 22 - Apr - 2022 06 Min 10 Sec 15/20
  • S
    sidra Naeem 22 - May - 2022 13 Min 44 Sec 13/20
  • A
    Abdul Qayyum 25 - May - 2024 07 Min 53 Sec 12/20
  • H
    Hassan Mehmood 03 - Apr - 2022 08 Min 20 Sec 12/20
  • S
    Shama Suleman 21 - May - 2022 12 Min 21 Sec 12/20
  • A
    Amjad Ali 07 - Jun - 2023 12 Min 49 Sec 12/20
  • S
    Shad Ali Shah 27 - Jul - 2024 15 Min 17 Sec 12/20
  • D
    DJ DJ 12 - Aug - 2022 11 Min 02 Sec 11/20
  • Z
    zaheer hussain 18 - Jan - 2024 14 Min 06 Sec 11/20
  • M
    Mahnoor NaSir 24 - May - 2022 07 Min 27 Sec 9/20
Sr.# Question Answer
1 If the demand for money increase relative to the supply of money
A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
2 The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.
A. decrease ; decrease
B. decrease ; increase
C. Increase ; decrease
D. increase ; increase
3 What is the significance of underestimating transactions money.
A. Monetary policy will be over simulating the economy
B. Monetary policy will be putting a drag on the economy
C. there is a need for money that the central bank should be meating.
D. The economy has too much money and there frore not enough spending.
4 In the Keynesian cross diagram a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to ______
A. up ; rise
B. up ; fall
C. down ;rise
D. down ; fall
5 A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.
A. decreases ; right
B. decreases ; fall
C. increases ; rise
D. increases ; fall
6 Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.
A. Panel a
B. Panel d
C. Panel b
D. Panel e
7 Credit constitutes.
A. Saving made available to borrowers
B. A form of liquid asset
C. bank loans converted into commodity money
D. Money used as a standard of deferred payment.
8 Time lags which often erode effectiveness of monetary and fiscal policy measures represent.
A. The change in export and import price.
B. Delays in the response of the economy to stabilization policy.
C. The foreign response to price changes
D. The change in exchang erates
9 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.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
10 Increasing the government budget deficit.
A. Increases output in the long run
B. Decreases output in the short run
C. Decreases output in the long run.
D. Decreases the interest rate in the medium run.
11 Why would corporations want to achieve zero balances in their checking accounts.
A. To earn more interest
B. To avoid paying taxes
C. to keep a low profile
D. To circumvent banking regulations
12 In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.
A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
13 A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______
A. rise; Lm ; RIGHT
B. RISE ; is; right
C. fall ; IS; Left
D. rise ; LM; left
14 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
15 A change in the money supply has a greater effect upon equilibrium income.
A. The more interest sensitive private sector spending is.
B. The less interest sensitive private sector spending is.
C. The smaller the expenditure multiplier is
D. The more interest sensitive money holdings are to the rate of interest.
16 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
17 Disposable income is obtained by subtracting ________ taxes from personal income
A. Indirect taxes
B. Direct taxes
C. Subsidies
D. None
18 The budget deficit tends to decrease when
A. GDP increases
B. GDP decreases rapidly
C. GDP remains unchanged
D. GDP decreases slightly
19 At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.
A. Less ; higher ; output.
B. more ; higher ; output
C. less ; lower ; unplanned investment
D. more ; lower ; unplanned investment
20 An item designed as money that is intrinsically worthless could the.
A. A currency note
B. A silver coin
C. A barter item
D. Any tradeable commodity

Test Questions

Is this page helpful?