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

In economics money refers to

Question # 2

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 3

The function of money do not include.

Question # 4

During period of inflation

Question # 5

Factors that cause the IS curve to shift include.

Question # 6

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

Question # 7

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.

Question # 8

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Question # 9

Commercial banks

Question # 10

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 11

In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.

Question # 12

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 ______ and the equilibrium level of aggregate output to ______

Question # 13

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

Question # 14

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

Question # 15

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Question # 16

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 17

The equilibrium level of saving is.

Question # 18

"Transactions" money is money used as a

Question # 19

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

Question # 20

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
3 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
4 Per Capita income is obtained by dividing National income by
A. Total labor Force in the country
B. Unemployed Youth in the country
C. Total population of that country
D. None
5 If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.
A. Pont Eo to point E1
B. Pont Eo to point E2
C. Pont Eo to point E3
D. Pont E3 to point E2
6 Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.
A. Panel a
B. Panel b
C. Panel c
D. Panel d
7 An increase in money demand other thing equal shifts the ____ curve to the___
A. IS ; right
B. IS ; Left
C. LM ; Left
D. LM ; right
8 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
9 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
10 "A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.
A. Upward
B. Down ward
C. To be zero
D. To match inflation

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