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

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

Question # 2

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 # 3

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

Question # 4

An example of nondiscretionary fiscal policy would be.

Question # 5

By controlling the monetary base economists mean

Question # 6

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 7

Money or paper currency serves at least _______ functions.

Question # 8

As the interest sensitivity of money demand increases

Question # 9

An item designed as money that is intrinsically worthless could the.

Question # 10

In the money market a condition of excess supply of money cna be eliminated by a _________ in aggregate output or a __ in the interest rate , both of which increase the quantity of money demanded.

Question # 11

The ratio of debt to GDP will be larger

Question # 12

The main source of interest profits for banks is.

Question # 13

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 # 14

The implementation lag for monetary policy is generally

Question # 15

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 16

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 17

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 18

Net taxes are.

Question # 19

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.

Question # 20

"Transactions" money is money used as a

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An item designed as money that is intrinsically worthless could the.
A. A currency note
B. A silver coin
C. A barter item
D. Any tradeable commodity
2 Under system fixed exchange rates which of the following policies promotes internal balance for a nation.
A. Fiscal policy
B. Monetary policy
C. Both fiscal policy and monetary policy
D. Neither fiscal policy nor monetary policy
3 If the original money supply is MSo and the original demand for money is MDo then
A. The equilibrium interest rate and savings are 5% and 50
B. The money supply is 200 and equilibrium income is 500
C. The equilibrium interest rate and income are 5% and 600
D. The speculative demand is 25
4 Increasing the government budget deficit.
A. Increases output in the long run
B. Decreases output in the short run
C. Decreases output in the long run.
D. Decreases the interest rate in the medium run.
5 Monetary policy is concerned with influencing.
A. The general level of money wages
B. The level of government expenditure
C. The price and availability of money
D. The level of shares on the stock market
6 When a government prints money to finance its expenditures it is likely to cause
A. Unemployment
B. Inflation
C. Deflation
D. Reductions in the use of barter
7 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 ______
A. up ; rise
B. up ; fall
C. down ;rise
D. down ; fall
8 How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.
A. Rs.3.5 billion
B. Rs.1.5 billion
C. Rs. 4.9 billion
D. Rs.2.8 billion
9 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
10 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise
A. demand ; right
B. demand ; left
C. supply ; right
D. supply ; left

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