PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
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.	A. Less ; higher ; output. B. more ; higher ; output C. less ; lower ; unplanned investment D. more ; lower ; unplanned investment
2	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 __________	A. rise ; LM ;right B. rise ; IS ; right C. Fall ; LM ; left D. rise ;IS; Left
3	What major advantage of monetary policy over fiscal policy does this clipping underline.	A. Monetary policy is more effective B. Monetary policy is lss discriminatory C. Monetary policy can influence interest rates D. Monetary policy can be undertaken more quickly
4	You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.	A. If you live in a 1st best world. B. If you live in a 2nd best world C. If the tax rates on some of the items are prohibitively high D. Either of the above
5	The main source of interest profits for banks is.	A. Checking account fees B. Loans C. Government securities D. Savigng accounts
6	A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.	A. Reduce B. Increase C. Have no effect on D. Double
7	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
8	An autonomous increase in money demand.	A. Shift the IS curve to the right B. Shifts the IS curve to the left C. Shift the LM curve to the right D. Shift the LM curve to the left
9	Which of the following part of M1	A. Stock negotiating accounts B. Automatic transfer system accounts C. Negotiable orders of withdrawal accounts D. Demand deposits of mutual saving banks.
10	An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.	A. rise ; rise B. rise ; fall C. fall ; rise D. fall ; fall

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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

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

Believers in the monetarist rule assert that

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

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

The purpose of financial intermediaries is.

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

A monetary expansion is characterized by

The budget deficit tends to decrease when

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

The IS curve shifts to the left when

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

An example of nondiscretionary fiscal policy would be.

Which of the following events will lead to a decrease in the demand for money.

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

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

If a perfectly competitive industry is in long run equilibrium all firms will

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

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

As the required reserve ratio is decreased the money multiplier.

According to classical models, the level of employment is determined primarily by

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

PPSC Economics Chapter 4 Important MCQ's

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The lag for fiscal policy is generally _ than it is for monetary policy.