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

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 2

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

Question # 3

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 4

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 5

Short run contractionary Fiscal policy would result in.

Question # 6

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

Question # 7

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

Question # 8

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

Question # 9

Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.

Question # 10

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 11

Which of the following is not an important variable in growth accounting calculations.

Question # 12

Money or paper currency serves at least _______ functions.

Question # 13

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 _____the equilibrium level of aggregate output to fall and the IS curve to shift to the.

Question # 14

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

Question # 15

A 15% VAT is a.

Question # 16

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 17

Factors that cause the IS curve to shift include.

Question # 18

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 # 19

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

Question # 20

What is the significance of underestimating transactions money.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 "Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.
A. Income growth
B. Unemployment
C. Money growth
D. Taxes
2 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
3 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
4 During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.
A. Stimulate the economy and increase empolyment.
B. Result in additional recessionary declines in employment and income
C. Stimulator defiance spending
D. Have an automatic stabilizing impact upon the economy
5 A business cycle refers to.
A. Fluctuations in the general price level
B. changes in the long term growth pattern of the CPI
C. The ups and downs of real GDP
D. Fluctuations in the level of corporate.
6 An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate
A. right ; falls
B. right ; rises
C. left ; falls
D. left ; rises
7 How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.
A. Rs.3.5 billion
B. Rs.1.5 billion
C. Rs. 4.9 billion
D. Rs.2.8 billion
8 In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.
A. increases ; increase
B. increases ; decrease
C. decreases ; decreases
D. decreases ; increses
9 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
10 If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.
A. Purchases ; decreases
B. sales ; decreases
C. purchases ; increases
D. sales ; increases

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