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 economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

Question # 2

The limit of an economy's total productive capacity at any given time is set by

Question # 3

Which of the following causes M1 demand to decrease.

Question # 4

Which of the following would qualify as an aggregate supply shock.

Question # 5

A Political problem with discretionary fiscal policy is the.

Question # 6

Total utility of a commodity is measured by which price of that commodity.

Question # 7

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 8

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 9

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

Question # 10

An increase in expected inflation is likely ot cause.

Question # 11

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 12

If the central Bank wished to Tighten money is would.

Question # 13

Which of the following would qualify as an aggregate demand shocks.

Question # 14

According to Marshall the basis of consumer surplus is.

Question # 15

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 16

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

Question # 17

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 18

The aggregate demand curve is downward sloping because a higher price level.

Question # 19

The Central Bank controls money and credit with the exception of.

Question # 20

If the original money supply is MSo and the original demand for money is MDo then

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve
A. fall ; leftward
B. rise ; leftward
C. fall ; rightward
D. rise ; rightward
2 A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
3 In the Keynesian cross diagram a decline 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. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right
4 The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.
A. Fiscal drag
B. The Laffer curve
C. Bracket creep
D. Debt burden
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 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
7 Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when
A. k increases and h increase
B. k increases and h decrease
C. k decrease and h increase
D. k decrease and h decrease
8 An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.
A. Cheaper ; decline
B. Cheaper ; rise
C. dearer ; decline
D. dearer ; rise
9 A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
10 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

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