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

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

Question # 2

Why would corporations want to achieve zero balances in their checking accounts.

Question # 3

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

Question # 4

There are _______ major instrument of monetary policy.

Question # 5

An example of nondiscretionary fiscal policy would be.

Question # 6

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 7

As the interest sensitivity of money demand increases

Question # 8

According to the supply side model a reduction in the tax rate.

Question # 9

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

Question # 10

Increasing the government budget deficit.

Question # 11

Which of the following persons would be considered unemployed.

Question # 12

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 13

A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.

Question # 14

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 15

The ____ lag for fiscal policy is generally _____ than it is for monetary policy.

Question # 16

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

Question # 17

In economics money refers to

Question # 18

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 19

The function of money do not include.

Question # 20

As the required reserve ratio is decreased the money multiplier.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In the money market a condition of excess supply of money cna be eliminated by a _________ in aggregate output or a __ in the interest rate , both of which increase the quantity of money demanded.
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
2 An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
3 When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.
A. Is unchaged
B. Increase by Rs.100,000
C. Increases by Rs. 1,000,000
D. None of these
4 The quantity of money demanded varies
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
5 When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.
A. Increase ; right ; fall; increase
B. increases ; left ; rise ; decrease
C. decreases ; left ;rise ; increases
D. decreases ; left ; fall ; increases
6 Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.
A. Left ward ; LM
B. Right ; LM
C. Left ward ; IS
D. Left ward ; AD
7 The board pumps money out of the economy by
A. Buying bonds
B. Selling bond
C. Creating cash
D. Lowering the reserve requirements.
8 A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.
A. Demand ; right
B. demand ; left
C. supply ; right
D. supply ; left
9 A monetary expansion is characterized by
A. Rising output and interest rates
B. Rising output and falling interest rates.
C. Constant output and falling interest rates
D. Falling output and interest rates
10 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.

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