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

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Question # 2

The quantity of money demanded varies

Question # 3

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

Question # 4

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

Question # 5

How do the banks gain from this corporate behavior.

Question # 6

The IS curve shifts to the left when

Question # 7

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

Question # 8

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 # 9

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Question # 10

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 11

Which policies are expenditure changing policies.

Question # 12

The main role of the Federal Reserve is to

Question # 13

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 14

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

Question # 15

A business cycle refers to.

Question # 16

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

Question # 17

"Transactions" money is money used as a

Question # 18

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 19

If firms paying employees monthly began paying them weakly then the demand for money would.

Question # 20

Factors that cause the IS curve to shift include.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 using money as a medium of exchange.
A. Requires people to math goods wanted with goods available.
B. Reduces the range of feasible exchanges in the economy
C. Inhibits economic transactions
D. Reduces the need for barter in the economy.
2 Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.
A. Low ; smaller ; high
B. Low ; larger ; high
C. low ; smaller ; middle
D. High ; larger ; low
3 An example of discretionary fiscal policy would be.
A. The operation of the welfare sate
B. The operation of the processive federal income tax
C. A tax cut adopted to stimulate consumption
D. An interest rate out in plummeted to stimulate consumption
4 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. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
5 If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.
A. Purchases ; decreases
B. sales ; increases
C. purchases ; increases
D. sales ; decreases
6 An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
7 A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.
A. Increases ; increases ; right
B. Increases ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; right
8 A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
9 There are _______ major instrument of monetary policy.
A. Three
B. Four
C. Five
D. None
10 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise
A. demand ; right
B. demand ; left
C. supply ; right
D. supply ; left

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