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

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

Question # 2

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

Question # 3

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 # 4

Employment tends to _______ whwn aggregate output.

Question # 5

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.

Question # 6

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 7

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.

Question # 8

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 9

The IMF is an agency charged with providing.

Question # 10

You move some of your savings account balance into your checking account.

Question # 11

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 12

The quantity of money demanded varies

Question # 13

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

Question # 14

The intersection of the IS and LM curves captures.

Question # 15

During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.

Question # 16

Monetary policy is concerned with influencing.

Question # 17

Identify the three motives of money demand.

Question # 18

An example of nondiscretionary fiscal policy would be.

Question # 19

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

Question # 20

An expansionary monetary policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
2 in The Liquidity trap region
A. Fiscal policy is not effective
B. Monetary policy is completely ineffective
C. Monetary policy is completely effective
D. Fiscal policy and monetary policy are equally effective
3 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases
4 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
5 The ratio of debt to GDP will be larger
A. The lower the real interest rate
B. The lower the growth rate of output
C. The lower the in initial debt ratio
D. The lower the ratio of the primary deficit to GDP
6 The main source of interest profits for banks is.
A. Checking account fees
B. Loans
C. Government securities
D. Savigng accounts
7 In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.
A. rise ; rise
B. rise; fall
C. fall ; rise
D. fall ; fall
8 When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.
A. 0.25
B. 4
C. 0.4
D. Rs.4 billion
9 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.
10 A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______
A. decreases ; rise
B. decreases ; fall
C. Increases ; rise
D. Increase ; fall

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