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

As the interest sensitivity of money demand increases

Question # 2

Which of the following measures is the best measure of money as a medium of exchange.

Question # 3

An autonomous increase in the value of the domestic exchange rate.

Question # 4

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 5

An item designed as money that is intrinsically worthless could the.

Question # 6

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 ______

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

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 9

If the central bank prints more 10 billion and spends them then as a direct result of this action.

Question # 10

using money as a medium of exchange.

Question # 11

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

Question # 12

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

Question # 13

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 # 14

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 15

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 16

The situation in which the imports are greater than exports is termed as.

Question # 17

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

Question # 18

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.

Question # 19

An autonomous increase in money demand.

Question # 20

Automatic stabilizers

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages
2 During period of inflation
A. Those people who have fixed incomes benefit
B. Every one's real income falls
C. those people who enter long term wage agreements benefit
D. Those people whose real income rises faster than the general price level benefit
3 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.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
4 Under a fixed exchange rate system an expansionary fiscal policy leads to a
A. Trade account deficit and a capital account surplus.
B. Trade account deficit and a capital account deficit
C. Trade account surplus and a capital account surplus
D. Trade account surplus and a capital accoundt deficit
5 Factor that cause the IS curve to shift include.
A. Change in autocoups consumer spending
B. Change in taxes
C. Change in government spending
D. All of the above
6 A decrease in fully autonomous investment other things equal shifts the ______ curve to the
A. IS ; right
B. IS ; Left
C. LM ; Left
D. LM ; right
7 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
8 If young busness professionals in Pakistan suddenly decide that driving japan made cars is an important status symbol net exports will tend to _____________causing aggregate demand to.
A. fall ; fall
B. fall ; rise
C. rise ; fall
D. rise ; rise
9 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.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
10 "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

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