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

Which of the followig does not shift the IS curve .

Question # 2

The equilibrium level of income is.

Question # 3

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 4

As the interest sensitivity of investment spending increase.

Question # 5

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 fall and the IS curve to shift to the.

Question # 6

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

Question # 7

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 ______ and the equilibrium level of aggregate output to ______

Question # 8

The opportunity cost of holding currency decreases when.

Question # 9

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Question # 10

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 rise and the IS curve to shift to the

Question # 11

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

Question # 12

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

Question # 13

"The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.

Question # 14

The board pumps money out of the economy by

Question # 15

As the required reserve ratio is decreased the money multiplier.

Question # 16

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 # 17

The ____ lag for fiscal policy is generally _____ than it is for monetary policy.

Question # 18

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

Question # 19

The purpose of financial intermediaries is.

Question # 20

The opportunity cost of holding currency decrease when

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The parable of Riding a Switchback suggests that stabilizing policy.
A. Is not sufficiently stimulating or contra citing the economy at any time
B. Is desirable
C. Is effective
D. Is stimulating or contracting the economy at the wrong times.
2 Which of the following part of M1
A. Stock negotiating accounts
B. Automatic transfer system accounts
C. Negotiable orders of withdrawal accounts
D. Demand deposits of mutual saving banks.
3 Which of the following would qualify as an aggregate demand shocks.
A. An unexpected increase in oil prices
B. A seasonally expected increase in oil prices
C. An unexpected reduction in consumer confidence
D. an anticipated tax cut
4 In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.
A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
5 By controlling the monetary base economists mean
A. Controlling the money multiplier
B. Restricting the amount of cash in circulation
C. Not allowing commercial banks to issue notes and coins
D. making banks keep a certain % of their assets as M0
6 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
7 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
8 If a perfectly competitive industry is in long run equilibrium all firms will
A. Have a marginal costs
B. Have identical supply curves
C. Operate at the point where marginal cost just covers all variable costs
D. Have equal fixed costs
9 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 rise and the IS curve to shift to the
A. up ; right
B. up ; left
C. down ;left
D. down ; right
10 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

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