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

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PPSC Economics Topic 4 Monetary & Fiscal Policy

00:00
Question # 1

The largest source of tax revenue for the federal government is.

Question # 2

How do the banks gain from this corporate behavior.

Question # 3

According to Marshall the basis of consumer surplus is.

Question # 4

Per Capita income is obtained by dividing National income by

Question # 5

Monetary policy can affect output.

Question # 6

Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.

Question # 7

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 _______

Question # 8

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 9

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 10

A major advantage of monetary over fiscal policy is that monetary policty.

Question # 11

Fiscal policy refers to.

Question # 12

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

Question # 13

The main role of the Federal Reserve is to

Question # 14

A 15% VAT is a.

Question # 15

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 16

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 17

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

Question # 18

The board pumps money out of the economy by

Question # 19

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

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 According to the supply side model a reduction in the tax rate.
A. Could reduce the size of any budget deficit
B. Would have no effect on output
C. Would have no effect on consumption
D. None of the above
2 A state of government bonds by the central bank should cause
A. Bond prices to rise
B. an increase in the supply of money
C. An increase in chartered banks loans
D. A decrease in reserves of the banking system.
3 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
4 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
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 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
7 "Far better for central bankers to get out of the fine tuning business instead they should d try to keep.
A. Taxes low
B. Budgets balanced
C. Money growth low
D. Government spending in check
8 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
9 The quantity of money demanded varies.
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
10 Which of the following events will lead to a decrease in the demand for money.
A. An increase in the level of aggregate output.
B. A decrease in the supply of money
C. A decrease in the interest rate
D. a decrease in the price level

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