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 problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 2

The purpose of fiscal policy is to

Question # 3

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 4

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

Question # 5

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

Question # 6

When considering any kind of economics indicator, prices are important because.

Question # 7

An item designed as money that is intrinsically worthless could the.

Question # 8

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 9

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.

Question # 10

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 11

The opportunity cost of holding currency decrease when

Question # 12

The government performs its redistribution function mainly through.

Question # 13

A business cycle refers to.

Question # 14

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Question # 15

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 16

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 17

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

Question # 18

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

Question # 19

When there is no change in central banking holding of international reserve balances a country's

Question # 20

If the central Bank wished to Tighten money is would.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 According to classical models, the level of employment is determined primarily by
A. The level of aggregate demand for goods and services
B. Prices and wages
C. Government taxation
D. Government spending
2 As the interest sensitivity of money demand increases
A. The multiplier term increases
B. Fiscal policy has a greater effect on output
C. Monetary policy has a smaller effect on output
D. All of the above
3 an asset that can easily be exchanged for goods and services is called a.
A. Financial asset
B. Barter like asset
C. Illegitimate asset
D. Liquid asset
4 The use of money is more efficient than barter because the introduction of money
A. Reduces the need for economic specialization
B. Reduces the need to exchange goods
C. Reduce the need for other stores of value
D. Reduces transaction costs
5 What happens to the money supply if the deficit is financed by selling bonds to the general public.
A. The money supply increaes
B. The money supply decreases
C. The money supply is unaffected
D. We cannot tell what will happen to the money supply
6 Weighted monetary aggregates
A. Ignore the fact that some assets are more money like than others.
B. Are constructed by simply adding up the outstanding amounts of various types of asssets
C. Give greater weight to currency than to savings deposits
D. Value coins more than currency.
7 In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to
A. increase ; increase
B. Increase ; decrease
C. decrease ; decrease
D. decrease ; increase
8 " 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.
A. The government may tax less
B. The debt may become excessive
C. The government may spend more
D. The money supply may increase excessively
9 Money or paper currency serves at least _______ functions.
A. Three
B. Four
C. Five
D. Seven
10 An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.
A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages

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