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

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 2

In economics money refers to

Question # 3

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

Question # 4

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

Question # 5

Monetary policy is concerned with influencing.

Question # 6

Believers in the monetarist rule assert that

Question # 7

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 # 8

Which of the followig does not shift the IS curve .

Question # 9

The ratio of debt to GDP will be larger

Question # 10

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

Question # 11

A sale of bonds by the central bank should cause.

Question # 12

During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.

Question # 13

The IS curve shifts to the left when

Question # 14

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

Question # 15

What's the most common way for a central bank to reduce the money supply.

Question # 16

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

Question # 17

Weighted monetary aggregates

Question # 18

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 19

When there is no change in central banking holding of international reserve balances a country's

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.
A. Raises ; LM; Right
B. Lowers; IS ; left
C. raises ; IS; right
D. Lower ; LM; left
2 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
3 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
4 The ratio of debt to GDP will be larger
A. The lower the real interest rate
B. The lower the growth rate of output
C. The lower the in initial debt ratio
D. The lower the ratio of the primary deficit to GDP
5 The Central Bank controls money and credit with the exception of.
A. Controlling the money base through open market operations
B. Controlling reserve requirements
C. Setting the discount rate of interest
D. controlling the stock market
6 What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
7 In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to
A. Increase ; increase
B. Increase ; decrease
C. decrees ; decrease
D. decrease ;Increase
8 When a government prints money to finance its expenditures it is likely to cause
A. Unemployment
B. Inflation
C. Deflation
D. Reductions in the use of barter
9 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
10 How do the banks gain from this corporate behavior.
A. More loans can be made
B. Tax free profits can be made
C. Interest rates can be increased
D. By circumvent banking regulations

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