PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	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
2	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
3	in The Liquidity trap region	A. Fiscal policy is not effective B. Monetary policy is completely ineffective C. Monetary policy is completely effective D. Fiscal policy and monetary policy are equally effective
4	The equilibrium level of saving is.	A. Rs.120 B. Rs.75 C. Rs.40 D. Rs.80
5	Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.	A. Positively ; positively B. Positively ; negatively C. negatively ; positively D. negatively ; negatively
6	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
7	An autonomous increase in the value of the domestic exchange rate.	A. Increases output net exports and the interest rate. B. Decreases output net exports and the interest rate C. Decreases output and net exports and increases the interest rate. D. Increase output and decreases net exports and the interest rate.
8	Monetary policy is concerned with influencing.	A. The general level of money wages B. The level of government expenditure C. The price and availability of money D. The level of shares on the stock market
9	An increase in spending those results from expansionary _______ policy cause the interest rate to.	A. fiscal ; rise B. fiscal ; fall C. incomes ; rise D. income ; fall
10	The real money demand doubles while the nominal money supply is unchanged what happens to the price level.	A. The price level increase by a factor of four B. The price level doubles C. The price level is unchanged D. The price level falls by one half.

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

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

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

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.

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

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.

A sale of bonds by the central bank should cause.

Which policies are expenditure changing policies.

There are ______ methods of measuring GDP

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

By controlling the monetary base economists mean

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 decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

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

The government performs its redistribution function mainly through.

When considering any kind of economics indicator, prices are important because.

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

The market price of bonds can fluctuate depending on

The implementation lag for monetary policy is generally

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

An expansionary monetary policy

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

PPSC Economics Chapter 4 Important MCQ's

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A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _ in net exports and a shifts of the IS curve.