PPSC Economics Topic 4 Monetary & Fiscal Policy

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Mahnoor NaSir 24 - May - 2022 07 Min 27 Sec 9/20

PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Automatic stabilizers	A. Counter balance fluctuations in economic activity. B. Reinforce fluctuations in economic activity C. Do not occur when the economy falls into recession D. Reduces the size of the deflationary gap
2	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
3	If the central Bank wished to Tighten money is would.	A. Lower the discount rate B. Sell government securities C. Lower the legal reserve ratio D. Lower the tax rate
4	The use of money is more efficient than barter because the introduction of money	A. Reduces the need for economic specialization B. Reduces the need to exchange goods C. Reduce the need for other stores of value D. Reduces transaction costs
5	Which of the following is not an important variable in growth accounting calculations.	A. Productivity growth B. Money supply growth C. Labor growth D. Capital growth
6	Short run contractionary Fiscal policy would result in.	A. Aggregate demand moving to the right B. Aggregate supply moving to the right C. Aggregate demand moving to the left D. Aggregate supply moving to the left
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	Which of the following persons would be considered unemployed.	A. a house wife B. A person who worked more than 20 hours in a family owned business C. A 15 years old looking for summer employment D. A recent college graduate looking for her fist job
9	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.
10	In the Keynesian cross diagram, a decline in autonomous consumer expenditure 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

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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 policty.

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

There are _______ major instrument of monetary policy.

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.

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

The rate of which central bank lends to commercial banks is known as

Employment tends to _______ whwn aggregate output.

"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.

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

The IS curve shifts to the left when

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.

Large difference is inflation rates among countries are almost always the result of large difference in.

The purpose of financial intermediaries is.

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

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

Credit constitutes.

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

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Why would corporations want to achieve zero balances in their checking accounts.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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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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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.