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

The board pumps money out of the economy by

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

The intersection of the IS and LM curves captures.

Question # 4

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 5

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

Question # 6

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

Question # 7

an asset that can easily be exchanged for goods and services is called a.

Question # 8

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

Question # 9

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

Question # 10

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 11

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 12

According to the supply side model a reduction in the tax rate.

Question # 13

The quantity of money demanded varies

Question # 14

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

Question # 15

By controlling the monetary base economists mean

Question # 16

The opportunity cost of holding currency decreases when.

Question # 17

The use of money is more efficient than barter because the introduction of money

Question # 18

When a government prints money to finance its expenditures it is likely to cause

Question # 19

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

Question # 20

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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.
A. decrease ; decrease
B. decrease ; increase
C. Increase ; decrease
D. increase ; increase
2 The situation in which the imports are greater than exports is termed as.
A. Trade surplus
B. Trade deficit
C. Budget surplus
D. None
3 According to classical models, the level of employment is determined primarily by
A. The level of aggregate demand for goods and services
B. Prices and wages
C. Government taxation
D. Government spending
4 An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate
A. right ; falls
B. right ; rises
C. left ; falls
D. left ; rises
5 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
6 Monetary policy can affect output.
A. this statement is always true
B. This statements always false
C. This statement is true only in the short run
D. This statement is true only in the medium run and the long run
7 When there is no change in central banking holding of international reserve balances a country's
A. Trae balance always equals 0
B. Current account balance always equals 0
C. Capital account balance always equals 0
D. Balance of payments always equal 0
8 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.
A. Increase G by Rs.1,000
B. Decrease G by Rs.250
C. Increase G by less than Rs.100
D. Decrease G by more than Rs.250 but less than Rs.1000
9 Identify the three motives of money demand.
A. Accumulative
B. Speculative precautionary
C. Speculative transaction precautionary
D. Precautionary special trisection
10 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

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