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

Try The 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

The main source of interest profits for banks is.

Question # 2

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

Question # 3

A sale of bonds by the central bank should cause.

Question # 4

If firms paying employees monthly began paying them weakly then the demand for money would.

Question # 5

Which of the following measures is the best measure of money as a medium of exchange.

Question # 6

Which of the following is not an important variable in growth accounting calculations.

Question # 7

Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.

Question # 8

As the interest sensitivity of investment spending increase.

Question # 9

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 10

The implementation lag for monetary policy is generally

Question # 11

When there is no change in central banking holding of international reserve balances a country's

Question # 12

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 13

Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.

Question # 14

Intermediate goods are meant for

Question # 15

What major advantage of monetary policy over fiscal policy does this clipping underline.

Question # 16

The board pumps money out of the economy by

Question # 17

The opportunity cost of holding currency decrease when

Question # 18

The largest source of tax revenue for the federal government is.

Question # 19

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

Question # 20

In economics money refers to

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In the Keynesian cross diagram a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to ______
A. up ; rise
B. up ; fall
C. down ;rise
D. down ; fall
2 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
3 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias
4 An increase in expected inflation is likely ot cause.
A. A decline in the demand for real balances
B. an increase in the demand for real balances.
C. No change i the demand for real balances
D. No change in the demand for real balances only of the income elasticity of real money demand is zero.
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.
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
6 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
7 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
A. up ; right
B. up ; left
C. down ;left
D. down ; right
8 The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.
A. An upward stopping LM curve
B. A downward sloping L curve
C. A downward sloping IS curve
D. The circular flow of money in the economy.
9 in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right
10 An increase in the money supply other thighs equal shifts the ______ curve to the
A. IS ; right
B. Is ; left
C. LM ; Left
D. LM ; right

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