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

Try The 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

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

Question # 2

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 3

"Transactions" money is money used as a

Question # 4

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 5

As the required reserve ratio is decreased the money multiplier.

Question # 6

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 # 7

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

Question # 8

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 # 9

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

Question # 10

Money or paper currency serves at least _______ functions.

Question # 11

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 12

According to Marshall the basis of consumer surplus is.

Question # 13

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

Question # 14

The market price of bonds can fluctuate depending on

Question # 15

Intermediate goods are meant for

Question # 16

If a perfectly competitive industry is in long run equilibrium all firms will

Question # 17

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

Question # 18

Which of the following causes M1 demand is decrease.

Question # 19

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Question # 20

A state of government bonds by the central bank should cause

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
2 A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.
A. fall ;LM; right
B. fall ;IS; Left
C. fall ;LM; Left
D. rise ;LM; Rifht
3 Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.
A. Money demand rises proportionately to the rise in wealth.
B. Money demand rises, but less than proportionately to the rise in wealth.
C. The overall effect in ambiguous
D. Money demand declines
4 Fiscal policy is purposeful movements in _____designed to direct an economy
A. Interest rate
B. Legal structures
C. Government regulations
D. D Government spending and taxes
5 Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.
A. Store of value
B. Medium of exchange
C. Standard of deferred payment
D. Unit of account
6 Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.
A. Increase G by Rs.1,000
B. Decrease G by Rs.250
C. Increase G by less than Rs.100
D. Decrease G by more than Rs.250 but less than Rs.1000
7 The opportunity cost of holding currency decrease when
A. Income decreases
B. The interest rate on bonds decreases
C. The interest rate on money decrease wealth decrease
D. Wealth decreases
8 An increase in money demand other thing equal shifts the ____ curve to the___
A. IS ; right
B. IS ; Left
C. LM ; Left
D. LM ; right
9 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.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
10 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 _____the equilibrium level of aggregate output to fall and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right

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