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

Which of the following causes M1 demand to decrease.

Question # 2

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

Question # 3

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 4

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

Question # 5

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 6

Money is

Question # 7

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 8

The function of money do not include.

Question # 9

Monetary policy is concerned with influencing.

Question # 10

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 11

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

Question # 12

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 13

using money as a medium of exchange.

Question # 14

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 15

Fiscal policy refers to.

Question # 16

Employment tends to _______ whwn aggregate output.

Question # 17

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 # 18

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

Question # 19

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 20

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

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PPSC Class Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.
A. Panel b
B. Panel c
C. Panel a
D. Panel d
3 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
4 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
5 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
6 Which of the followig does not shift the IS curve .
A. An increases in autonomous consumption
B. An increase in government spending.
C. A decline in government spending
D. A fall in theinterest rate
7 Under a fixed exchange rate system an expansionary fiscal policy leads to a
A. Trade account deficit and a capital account surplus.
B. Trade account deficit and a capital account deficit
C. Trade account surplus and a capital account surplus
D. Trade account surplus and a capital accoundt deficit
8 In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up 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
9 As the interest sensitivity of investment spending increase.
A. Monetary policy has a larger effect on output
B. Fiscal policy has a larger effect on output
C. The multiplier increases
D. All of the above
10 The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.
A. Bank's line of credit
B. Reserve ratio
C. Current ratio
D. Money multipiler

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