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

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.

Question # 2

You move some of your savings account balance into your checking account.

Question # 3

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

Question # 4

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 5

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

Question # 6

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

Question # 7

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

Question # 8

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 # 9

Which policies are expenditure changing policies.

Question # 10

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

Question # 11

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.

Question # 12

Monetary policy can affect output.

Question # 13

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

Question # 14

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

Question # 15

The market price of bonds can fluctuate depending on

Question # 16

Disposable income is obtained by subtracting ________ taxes from personal income

Question # 17

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

Question # 18

What is the significance of underestimating transactions money.

Question # 19

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

Question # 20

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.
A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
2 The budget deficit tends to decrease when
A. GDP increases
B. GDP decreases rapidly
C. GDP remains unchanged
D. GDP decreases slightly
3 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
4 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.
A. Overestimates inflation
B. Underestimates inflation
C. Is an erratic estimate of inflation
D. Remain an accurate estimate of inflation.
5 Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.
A. Increase G by Rs.1,000
B. Decrease G by Rs.250
C. Increase G by less than Rs.100
D. Decrease G by more than Rs.250 but less than Rs.1000
6 If young busness professionals in Pakistan suddenly decide that driving japan made cars is an important status symbol net exports will tend to _____________causing aggregate demand to.
A. fall ; fall
B. fall ; rise
C. rise ; fall
D. rise ; rise
7 Other things equal a decrease in autonomous consumption shifts the _____ curve to the
A. IS ; RIGHT
B. IS ; Left
C. LM ; Left
D. LF ; Right
8 The ____ lag for fiscal policy is generally _____ than it is for monetary policy.
A. Recognition ; shorter
B. Recognition ; longer
C. Implementation ; shorter
D. Implementation ; longer
9 What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
10 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases

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