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

An example of nondiscretionary fiscal policy would be.

Question # 2

in The Liquidity trap region

Question # 3

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

Question # 4

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

Question # 5

According to the Laffer curve as tax rates increase tax revenues.

Question # 6

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

Question # 7

The implementation lag for monetary policy is generally

Question # 8

Which of the followig does not shift the IS curve .

Question # 9

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

Question # 10

The quantity of money demanded varies.

Question # 11

Factor that cause the IS curve to shift include.

Question # 12

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

Question # 13

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 14

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

Question # 15

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 # 16

Which policies are expenditure changing policies.

Question # 17

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 # 18

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 19

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

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A good that is used as a medium of exchange as well as being a consumption good is called.
A. A barter money
B. A commodity money
C. A legal tender
D. A debased money
2 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
3 an asset that can easily be exchanged for goods and services is called a.
A. Financial asset
B. Barter like asset
C. Illegitimate asset
D. Liquid asset
4 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
5 In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to
A. Increase ; increase
B. Increase ; decrease
C. decrees ; decrease
D. decrease ;Increase
6 Which policies are expenditure changing policies.
A. Currency devaluation and revaluation
B. Import quotas and tariffs
C. Monetary and fiscal policy
D. Wage and price controls
7 "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.
A. Lower interest rates
B. Lower money supply
C. Lower unemployment
D. Higher inflation
8 If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.
A. Increase the minimum reserve asset ratio
B. Sell government securities on the open market
C. Buy government securities on the open market
D. Raise interest rates.
9 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
10 The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.
A. 40 percent and Rs. 4,000,000
B. 40 percent and Rs. 10,000,000
C. 25 percent and Rs. 2.500,000
D. 25 percent and Rs.10,000,000

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