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

Total utility of a commodity is measured by which price of that commodity.

Question # 2

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

Question # 3

Those who favor setting the target rate of inflation at about 3% believe.

Question # 4

Knowledge of the money supply can lead to good predications of nominal GDP only

Question # 5

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Question # 6

A monetary expansion is characterized by

Question # 7

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 8

A business cycle refers to.

Question # 9

If the Central Bank wanted to decrease the quantity of money held by the public it would.

Question # 10

"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 # 11

A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.

Question # 12

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 13

The purpose of financial intermediaries is.

Question # 14

"Transactions" money is money used as a

Question # 15

An autonomous increase in the value of the domestic exchange rate.

Question # 16

By controlling the monetary base economists mean

Question # 17

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

Question # 18

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

Question # 19

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 20

Commercial banks

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PPSC Class Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 What's the most common way for a central bank to reduce the money supply.
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bounds from the government
D. Buy bonds from the public
2 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
3 Time lags which often erode effectiveness of monetary and fiscal policy measures represent.
A. The change in export and import price.
B. Delays in the response of the economy to stabilization policy.
C. The foreign response to price changes
D. The change in exchang erates
4 Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.
A. Panel a
B. Panel d
C. Panel b
D. Panel e
5 Factor that cause the IS curve to shift include.
A. Change in autocoups consumer spending
B. Change in taxes
C. Change in government spending
D. All of the above
6 Per Capita income is obtained by dividing National income by
A. Total labor Force in the country
B. Unemployed Youth in the country
C. Total population of that country
D. None
7 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
8 An autonomous increase in the value of the domestic exchange rate.
A. Increases output net exports and the interest rate.
B. Decreases output net exports and the interest rate
C. Decreases output and net exports and increases the interest rate.
D. Increase output and decreases net exports and the interest rate.
9 The rate of which central bank lends to commercial banks is known as
A. reserve rate
B. Discount rate
C. Open market operation
D. None
10 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias

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