PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Increasing the government budget deficit.	A. Increases output in the long run B. Decreases output in the short run C. Decreases output in the long run. D. Decreases the interest rate in the medium run.
2	A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.	A. Increases ; increases ; right B. Increases ; decreases ; left C. decreases ; increases ; left D. decreases ; decreases ; right
3	In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to	A. increase ; increase B. Increase ; decrease C. decrease ; decrease D. decrease ; increase
4	A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate	A. right ; fall B. right ; rises C. left ; falls D. left ; rises
5	If the original money supply is MSo and the original demand for money is MDo then	A. The equilibrium interest rate and savings are 5% and 50 B. The money supply is 200 and equilibrium income is 500 C. The equilibrium interest rate and income are 5% and 600 D. The speculative demand is 25
6	What happens to the money supply if the deficit is financed by selling bonds to the general public.	A. The money supply increaes B. The money supply decreases C. The money supply is unaffected D. We cannot tell what will happen to the money supply
7	"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.	A. Income growth B. Unemployment C. Money growth D. Taxes
8	A state of government bonds by the central bank should cause	A. Bond prices to rise B. an increase in the supply of money C. An increase in chartered banks loans D. A decrease in reserves of the banking system.
9	Monetary policy is concerned with influencing.	A. The general level of money wages B. The level of government expenditure C. The price and availability of money D. The level of shares on the stock market
10	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.

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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

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

The purpose of financial intermediaries is.

An example of nondiscretionary fiscal policy would be.

"Transactions" money is money used as a

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Employment tends to _______ whwn aggregate output.

If the demand for money increase relative to the supply of money

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

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 rise and the IS curve to shift to the

An item designed as money that is intrinsically worthless could the.

Which of the followig does not shift the IS curve .

In economics money refers to

Identify the three motives of money demand.

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

The equilibrium level of income is.

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

Increasing the government budget deficit.

Which of the following causes M1 demand to decrease.

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

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Topic Test

Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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An increase in oil prices, such as the oil shocks in the 70 s, lead to ___ there by causing _

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _ and the IS curve to shift to the _