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

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Question # 1

Per Capita income is obtained by dividing National income by

Question # 2

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

Question # 3

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

Question # 4

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

Question # 5

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

Question # 6

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 7

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 8

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

Question # 9

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

Question # 10

Which of the following causes M1 demand is decrease.

Question # 11

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

Question # 12

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

Question # 13

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 14

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.

Question # 15

Total utility of a commodity is measured by which price of that commodity.

Question # 16

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

Question # 17

What major advantage of monetary policy over fiscal policy does this clipping underline.

Question # 18

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 19

The opportunity cost of holding currency decreases when.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 "The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.
A. Tax rates
B. The money supply
C. Aggregate demand
D. Government spending
2 A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______
A. decreases ; rise
B. decreases ; fall
C. Increases ; rise
D. Increase ; fall
3 A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.
A. fall ;LM; right
B. fall ;IS; Left
C. fall ;LM; Left
D. rise ;LM; Rifht
4 Commercial banks
A. Are financial intermediaries that offer demand deposits.
B. Are owned by the Federal Reserve
C. Are non profit banking institutions
D. Are overseen by the Federal savings and loan insurance corporation.
5 A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.
A. Demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
6 The main source of interest profits for banks is.
A. Checking account fees
B. Loans
C. Government securities
D. Savigng accounts
7 The IMF is an agency charged with providing.
A. Technical assistance to stock market and financial market problems.
B. Loans for post World War II reconstruction
C. Short term credit for international balance of payments deficits
D. Bonds denominated in U.S. dollars as a loan to LDCs
8 The central bank and the government are working against each other if as the government cuts taxes the central bank
A. Sells government bonds
B. Lowers the discount rate
C. Increase the money supply
D. Decrease the legal reserve requirements
9 Tax incidence is the
A. Ultimate distribution of a tax's burden
B. Measure of the inpat the tax has on employment and output
C.
Behavior of shifting the tax to another party
D. Structure of the tax
10 Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.
A. Store of value
B. Medium of exchange
C. Standard of deferred payment
D. Unit of account

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