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

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

Question # 2

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 3

There are _______ major instrument of monetary policy.

Question # 4

Identify the three motives of money demand.

Question # 5

Automatic stabilizers

Question # 6

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

Question # 7

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 8

The quantity of money demanded varies

Question # 9

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.

Question # 10

Fiscal policy refers to the manipulation of government income and expenditure to.

Question # 11

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

Question # 12

By controlling the monetary base economists mean

Question # 13

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

Question # 14

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

Question # 15

An increase in expected inflation is likely ot cause.

Question # 16

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Question # 17

Which policies are expenditure changing policies.

Question # 18

An example of discretionary fiscal policy would be.

Question # 19

When your grandmother keeps her savings hidden under her mattress she is using money as.

Question # 20

"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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 According to classical models, the level of employment is determined primarily by
A. The level of aggregate demand for goods and services
B. Prices and wages
C. Government taxation
D. Government spending
2 A major advantage of monetary over fiscal policy is that monetary policty.
A. Can be put into effect more quickly
B. Affects all sectors of the economy equally
C. Authorities are quicker to see the need for policy
D. Has a more direct and predictable impact on spending.
3 "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.
A. A higher interests rate
B. A higher reserve requirement
C. a decrease in the money supply
D. An increase in the money supply
4 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
5 When considering any kind of economics indicator, prices are important because.
A. They reflect the value of goods and services.
B. They are established by the government to control population 's needs
C. They categorize goods and services by their weight
D. Historically they have proved to the good predictors of futures unemployment.
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 The money multiple tells us teh ultimate increase in.
A. The income level due to an increase in the money base
B. The money supply due to an increase in the money base.
C. The money supply due to an increase in the income level
D. The income level due to an increase in the money supply
8 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.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
9 In the Keynesian cross diagram a decline 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
A. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right
10 The use of money is more efficient than barter because the introduction of money
A. Reduces the need for economic specialization
B. Reduces the need to exchange goods
C. Reduce the need for other stores of value
D. Reduces transaction costs

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