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

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 2

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

Question # 3

Monetary policy is concerned with influencing.

Question # 4

A checking deposit held at a commercial bank is considered ______ of that bank.

Question # 5

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

Question # 6

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

Question # 7

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

Question # 8

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 9

When considering any kind of economics indicator, prices are important because.

Question # 10

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

Question # 11

As the required reserve ratio is decreased the money multiplier.

Question # 12

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Question # 13

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 14

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

Question # 15

The market price of bonds can fluctuate depending on

Question # 16

Net taxes are.

Question # 17

Which of the following part of M1

Question # 18

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

Question # 19

Which policies are expenditure changing policies.

Question # 20

Automatic stabilizers

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
2 A good that is used as a medium of exchange as well as being a consumption good is called.
A. A barter money
B. A commodity money
C. A legal tender
D. A debased money
3 Why do people keep currency in their pockets when bank deposits pay interest.
A. Because banks might steal your money
B. Because currency is more liquid
C. Because bank deposits lose value due to inflation
D. Because bank deposits lose value due to exchange in interest rates.
4 Which of the following events will lead to a decrease in the demand for money.
A. An increase in the level of aggregate output.
B. A decrease in the supply of money
C. A decrease in the interest rate
D. a decrease in the price level
5 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
6 A monetary expansion is characterized by
A. Rising output and interest rates
B. Rising output and falling interest rates.
C. Constant output and falling interest rates
D. Falling output and interest rates
7 A change in the money supply has a greater effect upon equilibrium income.
A. The more interest sensitive private sector spending is.
B. The less interest sensitive private sector spending is.
C. The smaller the expenditure multiplier is
D. The more interest sensitive money holdings are to the rate of interest.
8 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
9 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
10 According to the supply side model a reduction in the tax rate.
A. Could reduce the size of any budget deficit
B. Would have no effect on output
C. Would have no effect on consumption
D. None of the above

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