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 intersection of the IS and LM curves captures.

Question # 2

The limit of an economy's total productive capacity at any given time is set by

Question # 3

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 4

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

Question # 5

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

Question # 6

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

Question # 7

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 8

Money is

Question # 9

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

Question # 10

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

Question # 11

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 12

Factor that cause the IS curve to shift include.

Question # 13

a contractionary monetary policy

Question # 14

An increase in expected inflation is likely ot cause.

Question # 15

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

Question # 16

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Question # 17

By financial crowding our economists mean

Question # 18

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

Question # 19

The quantity of money demanded varies

Question # 20

The parable of Riding a Switchback suggests that stabilizing policy.

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PPSC Class Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 If firms paying employees monthly began paying them weakly then the demand for money would.
A. Rise and income would rise
B. Rise and income would fall
C. Fall and income would rise
D. Fall and income would fall
2 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
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
3 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.
A. Fiscal drag
B. The Laffer curve
C. Bracket creep
D. Debt burden
4 Time lags which often erode effectiveness of monetary and fiscal policy measures represent.
A. The change in export and import price.
B. Delays in the response of the economy to stabilization policy.
C. The foreign response to price changes
D. The change in exchang erates
5 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
6 The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.
A. An upward stopping LM curve
B. A downward sloping L curve
C. A downward sloping IS curve
D. The circular flow of money in the economy.
7 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
8 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
9 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
10 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.

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