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

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

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PPSC Economics Topic 4 Monetary & Fiscal Policy

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Question # 1

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

Question # 2

"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 # 3

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 4

"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.

Question # 5

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

Question # 6

The purpose of financial intermediaries is.

Question # 7

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

Question # 8

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

Question # 9

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.

Question # 10

Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.

Question # 11

using money as a medium of exchange.

Question # 12

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

Question # 13

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

Question # 14

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

Question # 15

If the State bank of Pakistan wished to pursue a light monetary policy it would.

Question # 16

Which of the following causes M1 demand is decrease.

Question # 17

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 18

A business cycle refers to.

Question # 19

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 20

Increasing the government budget deficit.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
2 The IMF is an agency charged with providing.
A. Technical assistance to stock market and financial market problems.
B. Loans for post World War II reconstruction
C. Short term credit for international balance of payments deficits
D. Bonds denominated in U.S. dollars as a loan to LDCs
3 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
4 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.
5 The limit of an economy's total productive capacity at any given time is set by
A. The amount of money in circulation
B. Business demand for goods and services
C. The level of government spending and taxation
D. the quantity and quality of its productive resources
6 A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______
A. decreases ; rise
B. decreases ; fall
C. Increases ; rise
D. Increase ; fall
7 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.
A. If you live in a 1st best world.
B. If you live in a 2nd best world
C. If the tax rates on some of the items are prohibitively high
D. Either of the above
8 By financial crowding our economists mean
A. What the government borrows cannot be used for private investment
B. Government borrowing drives up interest rates.
C. Bank of England controls on commercial bank lending
D. Credit rationing
9 When there is no change in central banking holding of international reserve balances a country's
A. Trae balance always equals 0
B. Current account balance always equals 0
C. Capital account balance always equals 0
D. Balance of payments always equal 0
10 A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.
A. decreases ; rise
B. decreases ; fall
C. increases ; rise
D. increases ; fall

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