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

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Question # 1

Which of the following part of M1

Question # 2

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 3

"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 # 4

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

Question # 5

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

Question # 6

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 7

A business cycle refers to.

Question # 8

a contractionary monetary policy

Question # 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 ______ and the equilibrium level of aggregate output to ______

Question # 10

As the required reserve ratio is decreased the money multiplier.

Question # 11

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.

Question # 12

The quantity of money demanded varies

Question # 13

"Far better for central bankers to get out of the fine tuning business instead they should d try to keep.

Question # 14

Which of the following causes M1 demand is decrease.

Question # 15

If the central bank prints more 10 billion and spends them then as a direct result of this action.

Question # 16

Which of the followig does not shift the IS curve .

Question # 17

Net taxes are.

Question # 18

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Question # 19

By controlling the monetary base economists mean

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Tax incidence is the
A. Ultimate distribution of a tax's burden
B. Measure of the inpat the tax has on employment and output
C.
Behavior of shifting the tax to another party
D. Structure of the tax
2 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
3 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
4 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.
A. Panel a
B. Panel b
C. Panel c
D. Panel d
5 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
6 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
7 An example of nondiscretionary fiscal policy would be.
A. The operation of the welfare state
B. A Federal jobs program adopted to stimulate consumption
C. A tax cut adopted to stimulate consumption
D. An interest rate cut implemented to stimulate consumption
8 "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.
A. A higher interests rate
B. A higher reserve requirement
C. a decrease in the money supply
D. An increase in the money supply
9 An increase in autonomous consumer expenditure causes the equilibrium levelof 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
10 Net taxes are.
A. Government expenditures minus government revenues.
B. Taxes paid by firms and households to the government minus the transfer payments made to firms and household.
C. Taxes paid by firms and household to the government plus transfer payments made to firms and hose holds.
D. Taxes paid by firms and hose hold to the government minus the cost of collecting the taxes.

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