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

00:00
Question # 1

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 2

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 # 3

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

Question # 4

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

Question # 5

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

Question # 6

There are _______ major instrument of monetary policy.

Question # 7

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

Question # 8

You move some of your savings account balance into your checking account.

Question # 9

There are ______ methods of measuring GDP

Question # 10

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

Question # 11

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Question # 12

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 13

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Question # 14

The main source of interest profits for banks is.

Question # 15

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 # 16

As a result of the increase in government expenditures disposable income increases by.

Question # 17

Commercial banks

Question # 18

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 # 19

A major advantage of monetary over fiscal policy is that monetary policty.

Question # 20

The IMF is an agency charged with providing.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. Is unchaged
B. Increase by Rs.100,000
C. Increases by Rs. 1,000,000
D. None of these
2 Believers in the monetarist rule assert that
A. Lags are long and variable
B. the economy cna be stabilized by automatic mechanisms
C. The central bank should keep the money supply growth constant
D. All of the above
3 Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.
A. Reduce a balance of payments surplus
B. Reduce a balance of payments deficit
C. Increases both imports and exports
D. Decrease both imports and exports
4 An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports
A. Less ; decreases
B. Less ; increases
C. More ; decreases
D. more ; increases
5 If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.
A. Purchases ; decreases
B. sales ; decreases
C. purchases ; increases
D. sales ; increases
6 A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.
A. Reduce
B. Increase
C. Have no effect on
D. Double
7 The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.
A. Milton Friedman
B. Ronald reagan
C. Margaret Thatcher
D. John Maynard Keynes
8 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
9 In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
10 Per Capita income is obtained by dividing National income by
A. Total labor Force in the country
B. Unemployed Youth in the country
C. Total population of that country
D. None

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