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

If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.

Question # 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 __________

Question # 3

"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.

Question # 4

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

Question # 5

Credit constitutes.

Question # 6

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

Question # 7

Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if

Question # 8

Those who favor setting the target rate of inflation at about 3% believe.

Question # 9

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

Question # 10

The opportunity cost of holding currency decreases when.

Question # 11

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

Question # 12

By controlling the monetary base economists mean

Question # 13

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

Question # 14

Money or paper currency serves at least _______ functions.

Question # 15

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 16

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

Question # 17

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 fall and the IS curve to shift to the.

Question # 18

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 19

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 # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the
A. Net exports LM right
B. Net exports LM left
C. Money demand IS right
D. Money demand LM left
2 a contractionary monetary policy
A. Reduces interest rtes
B. Reduces real output
C. shifts the LM curve to the right
D. All of the above
3 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
4 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.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
5 A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
6 When your grandmother keeps her savings hidden under her mattress she is using money as.
A. a standard of deferred panyment
B. A comfortable thing for sleeping
C. A medium of exchange
D. A store of value
7 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
8 The IMF is an agency charged with providing.
A. Technical assistance to stock market and financial market problems.
B. Loans for post World War II reconstruction
C. Short term credit for international balance of payments deficits
D. Bonds denominated in U.S. dollars as a loan to LDCs
9 The largest source of tax revenue for the federal government is.
A. The personal income tax
B. The social security tax
C. The property tax
D. The sales tax
10 In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right

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