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

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Question # 1

To move from point E to point E1 is consistent with.

Question # 2

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

Question # 3

Weighted monetary aggregates

Question # 4

Believers in the monetarist rule assert that

Question # 5

Which of the following persons would be considered unemployed.

Question # 6

a contractionary monetary policy

Question # 7

How do the banks gain from this corporate behavior.

Question # 8

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

Question # 9

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

Question # 10

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

Question # 11

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 12

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

Question # 13

In economics money refers to

Question # 14

There are _______ major instrument of monetary policy.

Question # 15

an asset that can easily be exchanged for goods and services is called a.

Question # 16

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 17

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 18

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 19

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

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 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
2 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
3 A sale of bonds by the central bank should cause.
A. A fall in the interest rate
B. An increase in the money supply
C. A decrease in the reserves of the commercial banks
D. An increase in the commercial banks loans to the public
4 How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.
A. Rs.1 billion
B. Rs.2 billion
C. Rs.0.9 billion
D. Rs.0.5 billion
5 Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.
A. Store of value
B. Medium of exchange
C. Standard of deferred payment
D. Unit of account
6 Fiscal policy refers to the manipulation of government income and expenditure to.
A. control the volume and price of money
B. Limit the rate of increaes in incomes
C. Effect the value of the dollar on world financial market.
D. Affect the level of total expenditure output and employment
7 "The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.
A. Weaken fiscal policy
B. Avoid monetary policy errors
C. Strengthen the impact of monetary policy
D. Ensure the independence of the central bank
8 Credit constitutes.
A. Saving made available to borrowers
B. A form of liquid asset
C. bank loans converted into commodity money
D. Money used as a standard of deferred payment.
9 The opportunity cost of holding currency decreases when.
A. Income decreases
B. The interest rate on bonds decrease
C. Buying newly issued government bonds directly from the central bank
D. Buying newly issued government bonds directly to the central bank.
10 An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports
A. Less ; decreases
B. Less ; increases
C. More ; decreases
D. more ; increases

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