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

00:00
Question # 1

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 2

Fiscal policy refers to.

Question # 3

As the interest sensitivity of money demand increases

Question # 4

Employment tends to _______ whwn aggregate output.

Question # 5

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 6

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 # 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

The ratio of debt to GDP will be larger

Question # 9

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 10

using money as a medium of exchange.

Question # 11

To move from point E to point E1 is consistent with.

Question # 12

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 13

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

Question # 14

The opportunity cost of holding currency decrease when

Question # 15

The equilibrium level of saving is.

Question # 16

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

Question # 17

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 18

If the demand for money increase relative to the supply of money

Question # 19

The board pumps money out of the economy by

Question # 20

According to Marshall the basis of consumer surplus is.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.
A. Panel b
B. Panel c
C. Panel a
D. Panel d
2 Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.
A. Low ; smaller ; high
B. Low ; larger ; high
C. low ; smaller ; middle
D. High ; larger ; low
3 A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.
A. Reduce
B. Increase
C. Have no effect on
D. Double
4 A monetary expansion is characterized by
A. Rising output and interest rates
B. Rising output and falling interest rates.
C. Constant output and falling interest rates
D. Falling output and interest rates
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 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 board pumps money out of the economy by
A. Buying bonds
B. Selling bond
C. Creating cash
D. Lowering the reserve requirements.
8 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
9 Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.
A. Panel a
B. Panel d
C. Panel b
D. Panel e
10 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise
A. demand ; right
B. demand ; left
C. supply ; right
D. supply ; left

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