PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	The largest source of tax revenue for the federal government is.	A. The personal income tax B. The social security tax C. The property tax D. The sales tax
2	Weighted monetary aggregates	A. Ignore the fact that some assets are more money like than others. B. Are constructed by simply adding up the outstanding amounts of various types of asssets C. Give greater weight to currency than to savings deposits D. Value coins more than currency.
3	The opportunity cost of holding currency decreases when.	A. Income decreases B. The interest rate on bonds decrease C. Buying newly issued government bonds directly from the central bank D. Buying newly issued government bonds directly to the central bank.
4	The ratio of debt to GDP will be larger	A. The lower the real interest rate B. The lower the growth rate of output C. The lower the in initial debt ratio D. The lower the ratio of the primary deficit to GDP
5	An example of nondiscretionary fiscal policy would be.	A. The operation of the welfare state B. A Federal jobs program adopted to stimulate consumption C. A tax cut adopted to stimulate consumption D. An interest rate cut implemented to stimulate consumption
6	The function of money do not include.	A. an exchange of purchasing power B. A unit of account C. A medium of exchange D. A store of value
7	A major advantage of monetary over fiscal policy is that monetary policty.	A. Can be put into effect more quickly B. Affects all sectors of the economy equally C. Authorities are quicker to see the need for policy D. Has a more direct and predictable impact on spending.
8	Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.	A. Money demand declines first then rises when inflation increases B. Money demand rises C. The overall effect is ambiguous D. Money demand declines
9	"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
10	In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.	A. A relative large increase in Y, a smaller increate n P B. A relative large increase in P, a smaller increase in Y C. Both Y and P increasing with an percentage D. Only Y increase

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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

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

A 15% VAT is a.

A monetary expansion is characterized by

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

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

The board pumps money out of the economy by

As the interest sensitivity of investment spending increase.

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

The Central Bank controls money and credit with the exception of.

By financial crowding our economists mean

"Far better for central bankers to get out of the fine tuning business instead they should d try to keep.

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

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

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

By controlling the monetary base economists mean

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

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

What's the most common way for a central bank to reduce the money supply.

"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.

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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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If the Federal reserve conducts open market the money supply shifting LM curve to the left.

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the __ to shift

A decline in the money supply shifts the LM curve to the left causing the interest rate to ______ and output to_

Aggregate output and the interest rate are ____ related to government spending and are _ related to taxes.