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

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Question # 1

A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.

Question # 2

Money and income are.

Question # 3

The IS curve shifts to the left when

Question # 4

The investment demand curve shows the relationship between the levels of.

Question # 5

Believers in the monetarist rule assert that

Question # 6

The market price of bonds can fluctuate depending on

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

Question # 8

In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.

Question # 9

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

Question # 10

Which of the following causes M1 demand is decrease.

Question # 11

In economics money refers to

Question # 12

"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.

Question # 13

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

Question # 14

As the required reserve ratio is decreased the money multiplier.

Question # 15

" 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 # 16

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

Question # 17

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

Question # 18

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

Question # 19

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 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.
3 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.
4 A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.
A. decreases ; right
B. decreases ; fall
C. increases ; rise
D. increases ; fall
5 Under a fixed exchange rate system an expansionary fiscal policy leads to a
A. Trade account deficit and a capital account surplus.
B. Trade account deficit and a capital account deficit
C. Trade account surplus and a capital account surplus
D. Trade account surplus and a capital accoundt deficit
6 According to Marshall the basis of consumer surplus is.
A. Law of diminishing marginal utility.
B. Law of equal marginal utility
C. Law of proportions
D. All of the above
7 The IMF is an agency charged with providing.
A. Technical assistance to stock market and financial market problems.
B. Loans for post World War II reconstruction
C. Short term credit for international balance of payments deficits
D. Bonds denominated in U.S. dollars as a loan to LDCs
8 Which policies are expenditure changing policies.
A. Currency devaluation and revaluation
B. Import quotas and tariffs
C. Monetary and fiscal policy
D. Wage and price controls
9 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
10 If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.
A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect its ambiguous
D. Money demand declines

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