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

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 2

How do the banks gain from this corporate behavior.

Question # 3

The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.

Question # 4

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

Question # 5

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 6

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

Question # 7

Which policies are expenditure changing policies.

Question # 8

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

Question # 9

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 10

The budget deficit tends to decrease when

Question # 11

The aggregate demand curve is downward sloping because a higher price level.

Question # 12

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 # 13

The rate of which central bank lends to commercial banks is known as

Question # 14

The equilibrium level of saving is.

Question # 15

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.

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

Money or paper currency serves at least _______ functions.

Question # 18

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

Question # 19

If the original money supply is MSo and the original demand for money is MDo then

Question # 20

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The intersection of the IS and LM curves captures.
A. The equilibrium of the demand and supply sides of the economy
B. the equivalence of monetary and fiscal policy
C. Joint equilibrium in the goods and money markets
D. All of the above
2 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
3 In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.
A. IS ;right
B. IS ;Left
C. LM ; Left
D. LM ; Right
4 The opportunity cost of holding currency decreases when.
A. Income decreases
B. The interest rate on bonds decrease
C. Buying newly issued government bonds directly from the central bank
D. Buying newly issued government bonds directly to the central bank.
5 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
6 using money as a medium of exchange.
A. Requires people to math goods wanted with goods available.
B. Reduces the range of feasible exchanges in the economy
C. Inhibits economic transactions
D. Reduces the need for barter in the economy.
7 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
8 When a government prints money to finance its expenditures it is likely to cause
A. Unemployment
B. Inflation
C. Deflation
D. Reductions in the use of barter
9 If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.
A. Purchases ; decreases
B. sales ; increases
C. purchases ; increases
D. sales ; decreases
10 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls

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