PPSC Economics Ch 4 Monetary & Fiscal Policy

MCQ's Test For PPSC Economics Chapter 4 Monetary & Fiscal Policy

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

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PPSC Economics Chapter 4 Monetary & Fiscal Policy

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Question # 1

According to classical models, the level of employment is determined primarily by

The level of aggregate demand for goods and services A
Prices and wages B
Government taxation C
Government spending D

Question # 2

In the case of an expansionary _ policy the interest rate rise while in the case of an expansionary _____ policy the interest rate falls.

monetary ; monetary A
monetary ; fiscal B
fiscal ; monetary C
fiscal ; fiscal D

Question # 3

Factor that cause the IS curve to shift include.

Change in autocoups consumer spending A
Change in taxes B
Change in government spending C
All of the above D

Question # 4

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

fiscal ; expansionary A
fiscal ; contractionary B
monetary ; expansionary C
monetary ; contractionary D

Question # 5

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

Fiscal policy A
Monetary policy B
Both fiscal policy and monetary policy C
Neither fiscal policy nor monetary policy D

Question # 6

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

Lower the required reserve ratio and the statutory liquidity ratio. A
Lower interest rates B
Buy government securities on the open market C
Sell government securities on the open market D

Question # 7

Which of the following would qualify as an aggregate supply shock.

An unexpected increase in oil prices A
Seasonally expected increase in oil prices B
An unexpected reduction in consumer confidence C
an anticipated tax cut D

Question # 8

"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.

By buying bonds A
By selling bonds B
By changing reserve requirements C
All of the above D

Question # 9

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Lower interest rates A
Lower money supply B
Lower unemployment C
Higher inflation D

Question # 10

Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.

Panel a A
Panel b B
Panel c C
Panel d D

Question # 11

The purpose of financial intermediaries is.

To allow more saving than investment A
To discourage consumption spending B
To collect income taxes for the government C
To serve are middlemen between savers and borrowers. D

Question # 12

Credit constitutes.

Saving made available to borrowers A
A form of liquid asset B
bank loans converted into commodity money C
Money used as a standard of deferred payment. D

Question # 13

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

Productivity A
Real income growth B
The growth rates of real money demand C
The growth rates of nominal money supplies D

Question # 14

A monetary expansion is characterized by

Rising output and interest rates A
Rising output and falling interest rates. B
Constant output and falling interest rates C
Falling output and interest rates D

Question # 15

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

Rises ; rises A
rises ; falls B
falls ; rises C
falls ; falls D

Question # 16

By financial crowding our economists mean

What the government borrows cannot be used for private investment A
Government borrowing drives up interest rates. B
Bank of England controls on commercial bank lending C
Credit rationing D

Question # 17

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

They reflect the value of goods and services. A
They are established by the government to control population 's needs B
They categorize goods and services by their weight C
Historically they have proved to the good predictors of futures unemployment. D

Question # 18

An autonomous increase in money demand.

Shift the IS curve to the right A
Shifts the IS curve to the left B
Shift the LM curve to the right C
Shift the LM curve to the left D

Question # 19

Intermediate goods are meant for

Direct use by the consumers A
Further processing B
The term do not exist C
None D

Question # 20

Weighted monetary aggregates

Ignore the fact that some assets are more money like than others. A
Are constructed by simply adding up the outstanding amounts of various types of asssets B
Give greater weight to currency than to savings deposits C
Value coins more than currency. D

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PPSC Economics Chapter 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Chapter 4 Monetary & Fiscal Policy

PPSC Economics Chapter 4 Monetary & Fiscal Policy

According to classical models, the level of employment is determined primarily by

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Factor that cause the IS curve to shift include.

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

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

Which of the following would qualify as an aggregate supply shock.

"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.

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.

The purpose of financial intermediaries is.

Credit constitutes.

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

A monetary expansion is characterized by

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

By financial crowding our economists mean

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

An autonomous increase in money demand.

Intermediate goods are meant for

Weighted monetary aggregates

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In the case of an expansionary _ policy the interest rate rise while in the case of an expansionary _____ policy the interest rate falls.