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

Fiscal policy refers to.

Question # 2

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 3

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 4

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 5

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 6

If the Central Bank wanted to decrease the quantity of money held by the public it would.

Question # 7

If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.

Question # 8

Weighted monetary aggregates

Question # 9

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

Question # 10

The function of money do not include.

Question # 11

Which of the following persons would be considered unemployed.

Question # 12

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

Question # 13

The purpose of financial intermediaries is.

Question # 14

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

Question # 15

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

Question # 16

" A growing number of economists view the Fed's new willingness to take on more of the nation's debt as inflationary in the long run." This inflation worry is because.

Question # 17

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 18

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 19

The IS curve shifts to the left when

Question # 20

When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An increase in spending those results from expansionary _______ policy cause the interest rate to.
A. fiscal ; rise
B. fiscal ; fall
C. incomes ; rise
D. income ; fall
2 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
3 Commercial banks
A. Are financial intermediaries that offer demand deposits.
B. Are owned by the Federal Reserve
C. Are non profit banking institutions
D. Are overseen by the Federal savings and loan insurance corporation.
4 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
5 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
6 An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.
A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages
7 How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.
A. Rs.3.5 billion
B. Rs.1.5 billion
C. Rs. 4.9 billion
D. Rs.2.8 billion
8 A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______
A. rise; Lm ; RIGHT
B. RISE ; is; right
C. fall ; IS; Left
D. rise ; LM; left
9 An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the
A. Net exports LM right
B. Net exports LM left
C. Money demand IS right
D. Money demand LM left
10 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls

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