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

00:00
Question # 1

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

Question # 2

As the interest sensitivity of money demand increases

Question # 3

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 4

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

Question # 5

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

Question # 6

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

Question # 7

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

Question # 8

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 9

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

Question # 10

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

Question # 11

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

Question # 12

Which of the following is not an important variable in growth accounting calculations.

Question # 13

Which of the following would qualify as an aggregate demand shocks.

Question # 14

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

Question # 15

A change in the money supply has a greater effect upon equilibrium income.

Question # 16

In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.

Question # 17

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 18

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

Question # 19

" 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 # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; Left
2 If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.
A. Purchases ; decreases
B. sales ; increases
C. purchases ; increases
D. sales ; decreases
3 The budget deficit tends to decrease when
A. GDP increases
B. GDP decreases rapidly
C. GDP remains unchanged
D. GDP decreases slightly
4 The limit of an economy's total productive capacity at any given time is set by
A. The amount of money in circulation
B. Business demand for goods and services
C. The level of government spending and taxation
D. the quantity and quality of its productive resources
5 A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
6 A good that is used as a medium of exchange as well as being a consumption good is called.
A. A barter money
B. A commodity money
C. A legal tender
D. A debased money
7 Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.
A. Low ; smaller ; high
B. Low ; larger ; high
C. low ; smaller ; middle
D. High ; larger ; low
8 The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.
A. Bank's line of credit
B. Reserve ratio
C. Current ratio
D. Money multipiler
9 Short run contractionary Fiscal policy would result in.
A. Aggregate demand moving to the right
B. Aggregate supply moving to the right
C. Aggregate demand moving to the left
D. Aggregate supply moving to the left
10 In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.
A. IS ;right
B. IS ;Left
C. LM ; Left
D. LM ; Right

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