PPSC Economics Topic 4 Monetary & Fiscal Policy

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

A sale of bonds by the central bank should cause.

A fall in the interest rate A
An increase in the money supply B
A decrease in the reserves of the commercial banks C
An increase in the commercial banks loans to the public D

Question # 2

A decline in the money supply shifts the LM curve to the left causing the interest rate to ______ and output to_

rise ; rise A
rise ; fall B
fall ; rise C
fall ; fall D

Question # 3

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

store of value A
Unit of account B
Medium of exchange C
Standard of deferred payment D

Question # 4

The quantity of money demanded varies

Directly with both prices and output A
Inversely with both prices and output B
Directly with prices and inversely with output C
Inversely with prices and directly with output D

Question # 5

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.

up ; left A
up ; right B
down ; left C
down ; right D

Question # 6

What is the significance of underestimating transactions money.

Monetary policy will be over simulating the economy A
Monetary policy will be putting a drag on the economy B
there is a need for money that the central bank should be meating. C
The economy has too much money and there frore not enough spending. D

Question # 7

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to ___ at any given interest rate and shifts the curve to the

rise ; LM ;right A
rise ; IS ; right B
fall ; LM, Left C
rise ; IS ; Left D

Question # 8

A state of government bonds by the central bank should cause

Bond prices to rise A
an increase in the supply of money B
An increase in chartered banks loans C
A decrease in reserves of the banking system. D

Question # 9

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to ________ at shifts the _ curve to the _____

rise ; LM ;right A
rise ; IS ; right B
Fall ; LM ; left C
rise ;IS; right D

Question # 10

How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.

Rs.1 billion A
Rs.2 billion B
Rs.0.9 billion C
Rs.0.5 billion D

Question # 11

Intermediate goods are meant for

Direct use by the consumers A
Further processing B
The term do not exist C
None D

Question # 12

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

Increases output net exports and the interest rate. A
Decreases output net exports and the interest rate B
Decreases output and net exports and increases the interest rate. C
Increase output and decreases net exports and the interest rate. D

Question # 13

The implementation lag for monetary policy is generally

Much longer than it is for fiscal policy A
Unrelated to central bank action B
The same as it is for fiscal policy C
Much shorter than it is for fiscal policy. D

Question # 14

in The Liquidity trap region

Fiscal policy is not effective A
Monetary policy is completely ineffective B
Monetary policy is completely effective C
Fiscal policy and monetary policy are equally effective D

Question # 15

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

0.25 A
4 B
0.4 C
Rs.4 billion D

Question # 16

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.

up ; rise A
up ; fall B
down ;rise C
down ; fall D

Question # 17

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

Crowding out A
Recognition lag B
Public sector borrowing requirement C
Fiscal drag D

Question # 18

Increasing the government budget deficit.

Increases output in the long run A
Decreases output in the short run B
Decreases output in the long run. C
Decreases the interest rate in the medium run. D

Question # 19

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

more ; iincreases A
less ; increases B
more ; decreases C
more ; increases D

Question # 20

An expansionary monetary policy

Reduces interest rates A
Increases real output B
Shifts the LM curve to the right C
All of the above D

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

A sale of bonds by the central bank should cause.

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

The quantity of money demanded varies

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.

What is the significance of underestimating transactions money.

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

A state of government bonds by the central bank should cause

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.

Intermediate goods are meant for

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

The implementation lag for monetary policy is generally

in The Liquidity trap region

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

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.

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

Increasing the government budget deficit.

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

An expansionary monetary policy

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A decline in the money supply shifts the LM curve to the left causing the interest rate to ______ and output to_

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to ___ at any given interest rate and shifts the curve to the

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to ________ at shifts the _ curve to the _____

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.