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

"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 # 2

Which of the following causes M1 demand is decrease.

Question # 3

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 4

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

Question # 5

Which policies are expenditure changing policies.

Question # 6

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.

Question # 7

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

Question # 8

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

Question # 9

Which of the following causes M1 demand to decrease.

Question # 10

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

Question # 11

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

Question # 12

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

Question # 13

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

Question # 14

How do the banks gain from this corporate behavior.

Question # 15

The opportunity cost of holding currency decreases when.

Question # 16

Disposable income is obtained by subtracting ________ taxes from personal income

Question # 17

The opportunity cost of holding currency decrease when

Question # 18

A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

Question # 19

Increasing the government budget deficit.

Question # 20

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and 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 _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
2 An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
3 "The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.
A. Lower interest rates
B. Lower money supply
C. Lower unemployment
D. Higher inflation
4 How do the banks gain from this corporate behavior.
A. More loans can be made
B. Tax free profits can be made
C. Interest rates can be increased
D. By circumvent banking regulations
5 Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if
A. The IS curve shifts left ward
B. The IS curve shifts right ward
C. The money supply increase
D. Taxes are cut
6 A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; right
7 An example of discretionary fiscal policy would be.
A. The operation of the welfare sate
B. The operation of the processive federal income tax
C. A tax cut adopted to stimulate consumption
D. An interest rate out in plummeted to stimulate consumption
8 The situation in which the imports are greater than exports is termed as.
A. Trade surplus
B. Trade deficit
C. Budget surplus
D. None
9 The purpose of financial intermediaries is.
A. To allow more saving than investment
B. To discourage consumption spending
C. To collect income taxes for the government
D. To serve are middlemen between savers and borrowers.
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
A. up ; right
B. up ; left
C. down ;left
D. down ; right

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