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

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Question # 1

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 2

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 3

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

Question # 4

Which of the following is not an important variable in growth accounting calculations.

Question # 5

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

Question # 6

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 # 7

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

Question # 8

The IMF is an agency charged with providing.

Question # 9

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

Question # 10

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

Question # 11

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 12

The aggregate demand curve is downward sloping because a higher price level.

Question # 13

The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.

Question # 14

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 # 15

"Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.

Question # 16

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Question # 17

In the Keynesian cross diagram an increasing investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to rise and the IS curve to shift to the

Question # 18

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

Question # 19

A business cycle refers to.

Question # 20

an asset that can easily be exchanged for goods and services is called a.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
2 The rate of which central bank lends to commercial banks is known as
A. reserve rate
B. Discount rate
C. Open market operation
D. None
3 If firms paying employees monthly began paying them weakly then the demand for money would.
A. Rise and income would rise
B. Rise and income would fall
C. Fall and income would rise
D. Fall and income would fall
4 The quantity of money demanded varies
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
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 At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.
A. Less ; higher ; output.
B. more ; higher ; output
C. less ; lower ; unplanned investment
D. more ; lower ; unplanned investment
7 An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
8 According to the Laffer curve as tax rates increase tax revenues.
A. Decrease continuously.
B. Initially decrease and then increase
C. Rise continuously
D. Initially increase and then decrease
9 Identify the three motives of money demand.
A. Accumulative
B. Speculative precautionary
C. Speculative transaction precautionary
D. Precautionary special trisection
10 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.

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