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

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 2

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 # 3

Intermediate goods are meant for

Question # 4

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 5

a contractionary monetary policy

Question # 6

If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.

Question # 7

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 8

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

Question # 9

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

Question # 10

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

Question # 11

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 12

The main source of interest profits for banks is.

Question # 13

An example of discretionary fiscal policy would be.

Question # 14

The ratio of debt to GDP will be larger

Question # 15

If the demand for money increase relative to the supply of money

Question # 16

To move from point E to point E1 is consistent with.

Question # 17

Fiscal policy refers to the manipulation of government income and expenditure to.

Question # 18

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

Question # 19

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

Question # 20

Per Capita income is obtained by dividing National income by

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Large difference is inflation rates among countries are almost always the result of large difference in.
A. Productivity
B. Real income growth
C. The growth rates of real money demand
D. The growth rates of nominal money supplies
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 If the demand for money increase relative to the supply of money
A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
4 A business cycle refers to.
A. Fluctuations in the general price level
B. changes in the long term growth pattern of the CPI
C. The ups and downs of real GDP
D. Fluctuations in the level of corporate.
5 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 ______
A. up ; rise
B. up ; fall
C. down ;rise
D. down ; fall
6 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
7 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
8 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
9 Monetary policy can affect output.
A. this statement is always true
B. This statements always false
C. This statement is true only in the short run
D. This statement is true only in the medium run and the long run
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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