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

00:00
Question # 1

Identify the three motives of money demand.

Question # 2

A monetary expansion is characterized by

Question # 3

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.

Question # 4

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.

Question # 5

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 6

If the central bank prints more 10 billion and spends them then as a direct result of this action.

Question # 7

The opportunity cost of holding currency decrease when

Question # 8

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 9

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

Question # 10

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

Question # 11

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 # 12

The main role of the Federal Reserve is to

Question # 13

There are _______ major instrument of monetary policy.

Question # 14

As the interest sensitivity of money demand increases

Question # 15

A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.

Question # 16

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 17

The main source of interest profits for banks is.

Question # 18

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

Question # 19

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

Question # 20

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Which of the following is not an important variable in growth accounting calculations.
A. Productivity growth
B. Money supply growth
C. Labor growth
D. Capital growth
2 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases
3 Credit constitutes.
A. Saving made available to borrowers
B. A form of liquid asset
C. bank loans converted into commodity money
D. Money used as a standard of deferred payment.
4 Which of the followig does not shift the IS curve .
A. An increases in autonomous consumption
B. An increase in government spending.
C. A decline in government spending
D. A fall in theinterest rate
5 The opportunity cost of holding currency decrease when
A. Income decreases
B. The interest rate on bonds decreases
C. The interest rate on money decrease wealth decrease
D. Wealth decreases
6 An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.
A. Cheaper ; decline
B. Cheaper ; rise
C. dearer ; decline
D. dearer ; rise
7 Money is
A. An indicator of the scarcity of wants
B. Anything that sellers accept i exchange for goods and services.
C. A form of barter
D. Anything that the government classifies as a trade commodity.
8 A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______
A. rise; Lm ; RIGHT
B. RISE ; is; right
C. fall ; IS; Left
D. rise ; LM; left
9 The market price of bonds can fluctuate depending on
A. How many bonds were sold
B. Who bought the bonds
C. The amount of the coupon
D. The interest rate
10 An increase in government spending 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 ; LM ;Left
C. fall ; IS ; Left
D. rise ; IS ;right

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