PPSC Economics Topic 4 Monetary & Fiscal Policy

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

Tax incidence is the

Ultimate distribution of a tax's burden A
Measure of the inpat the tax has on employment and output B
Behavior of shifting the tax to another party
C
Structure of the tax D

Question # 2

The purpose of financial intermediaries is.

To allow more saving than investment A
To discourage consumption spending B
To collect income taxes for the government C
To serve are middlemen between savers and borrowers. D

Question # 3

An example of nondiscretionary fiscal policy would be.

The operation of the welfare state A
A Federal jobs program adopted to stimulate consumption B
A tax cut adopted to stimulate consumption C
An interest rate cut implemented to stimulate consumption D

Question # 4

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Store of value A
Medium of exchange B
Standard of deferred payment C
Unit of account D

Question # 5

Intermediate goods are meant for

Direct use by the consumers A
Further processing B
The term do not exist C
None D

Question # 6

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Overestimates inflation A
Underestimates inflation B
Is an erratic estimate of inflation C
Remain an accurate estimate of inflation. D

Question # 7

The quantity of money demanded varies.

Directly with both prices and output A
Inversely with both prices and output B
Directly with prices and inversely with output C
Inversely with prices and directly with output D

Question # 8

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

The change in export and import price. A
Delays in the response of the economy to stabilization policy. B
The foreign response to price changes C
The change in exchang erates D

Question # 9

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

M1 is larger than M2 A
The demand for M2 is more stable B
M1 includes more liquid assets the M2 C
None of the above answers is correct. D

Question # 10

The money multiple tells us teh ultimate increase in.

The income level due to an increase in the money base A
The money supply due to an increase in the money base. B
The money supply due to an increase in the income level C
The income level due to an increase in the money supply D

Question # 11

A major advantage of monetary over fiscal policy is that monetary policy

Can be put into effect more quickly A
Affects all sectors of the economy equally B
Authorities are quicker to see the need for policy C
Has a more direct and predictable impact on spending. D

Question # 12

As a result of the increase in government expenditures disposable income increases by.

Rs.10 billion A
Rs.9 billion B
Rs.20 billion C
Rs.5 billion D

Question # 13

Which of the following part of M1

Stock negotiating accounts A
Automatic transfer system accounts B
Negotiable orders of withdrawal accounts C
Demand deposits of mutual saving banks. D

Question # 14

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

right ; falls A
right ; rises B
left ; falls C
left ; rises D

Question # 15

At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.

Less ; higher ; output. A
more ; higher ; output B
less ; lower ; unplanned investment C
more ; lower ; unplanned investment D

Question # 16

Factors that cause the IS curve to shift include.

Changes in autonomous consumer spending A
Changes in government spending B
Changes in investment spending related to business confidence C
All of the above D

Question # 17

A tax increase ______ disposable income consumption expenditure and shifts the IS curve to the.

Increase; increases ; right A
Increase ; decreases ; left B
decreases ; increases ; left C
decreases ; decreases ; left D

Question # 18

The use of money is more efficient than barter because the introduction of money

Reduces the need for economic specialization A
Reduces the need to exchange goods B
Reduce the need for other stores of value C
Reduces transaction costs D

Question # 19

an asset that can easily be exchanged for goods and services is called a.

Financial asset A
Barter like asset B
Illegitimate asset C
Liquid asset D

Question # 20

If Federal reserve conducts open market sales, the money supply _ shifting the LM curve to the___

decreases ; right A
decreases ; left B
Increases ; right C
Increase ; left D

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

Tax incidence is the

The purpose of financial intermediaries is.

An example of nondiscretionary fiscal policy would be.

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Intermediate goods are meant for

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

The quantity of money demanded varies.

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

The money multiple tells us teh ultimate increase in.

A major advantage of monetary over fiscal policy is that monetary policy

As a result of the increase in government expenditures disposable income increases by.

Which of the following part of M1

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

Factors that cause the IS curve to shift include.

A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.

The use of money is more efficient than barter because the introduction of money

an asset that can easily be exchanged for goods and services is called a.

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

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At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.

A tax increase ______ disposable income consumption expenditure and shifts the IS curve to the.

If Federal reserve conducts open market sales, the money supply _ shifting the LM curve to the___