PPSC Economics Topic 4 Monetary & Fiscal Policy

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

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Mahnoor NaSir 24 - May - 2022 07 Min 27 Sec 9/20

PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	When a government prints money to finance its expenditures it is likely to cause	A. Unemployment B. Inflation C. Deflation D. Reductions in the use of barter
2	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
3	If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.	A. Increase the minimum reserve asset ratio B. Sell government securities on the open market C. Buy government securities on the open market D. Raise interest rates.
4	At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.	A. Less ; higher ; output. B. more ; higher ; output C. less ; lower ; unplanned investment D. more ; lower ; unplanned investment
5	What happens to the money supply if the deficit is financed by selling bonds to the central bank.	A. The money supply increases B. The money supply decreases C. The money supply is unaffected D. We cannot tell what will happen to the money supply
6	Increasing the government budget deficit.	A. Increases output in the long run B. Decreases output in the short run C. Decreases output in the long run. D. Decreases the interest rate in the medium run.
7	A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________	A. rise ; LM ;right B. rise ; IS ; right C. Fall ; LM ; left D. rise ;IS; Left
8	How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.	A. Rs.3.5 billion B. Rs.1.5 billion C. Rs. 4.9 billion D. Rs.2.8 billion
9	A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate	A. Rises ; rises B. rises ; falls C. falls ; rises D. falls ; falls
10	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

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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

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

Identify the three motives of money demand.

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

If a perfectly competitive industry is in long run equilibrium all firms will

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

As a result of the increase in government expenditures disposable income increases by.

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

A monetary expansion is characterized by

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

An example of nondiscretionary fiscal policy would be.

Which of the following part of M1

The limit of an economy's total productive capacity at any given time is set by

Disposable income is obtained by subtracting ________ taxes from personal income

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Which policies are expenditure changing policies.

An expansionary monetary policy

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

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

in The Liquidity trap region

The quantity of money demanded varies.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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A decline in the money______ shifts the LM curve to the causing the interest rate to rise and output to fall.

An increase in money ___ shifts the LM curve to the _ causing the interest rate to fall and output to rise

An increase in money demand other thing equal shifts the __ curve to the_