PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.	A. Left ward ; LM B. Right ; LM C. Left ward ; IS D. Left ward ; AD
2	Which of the following causes M1 demand to decrease.	A. A fall in the tax rate B. An increase in income C. A fall in the interest rate D. An increase in the use of credit cards
3	A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate	A. right ; fall B. right ; rises C. left ; falls D. left ; rises
4	How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.	A. Rs.1 billion B. Rs.2 billion C. Rs.0.9 billion D. Rs.0.5 billion
5	Money and income are.	A. Mirror image of each other B. Two quite different concepts C. Both measured as a per annum flow D. Two ways of looking at the same thing.
6	Short run contractionary Fiscal policy would result in.	A. Aggregate demand moving to the right B. Aggregate supply moving to the right C. Aggregate demand moving to the left D. Aggregate supply moving to the left
7	The intersection of the IS and LM curves captures.	A. The equilibrium of the demand and supply sides of the economy B. the equivalence of monetary and fiscal policy C. Joint equilibrium in the goods and money markets D. All of the above
8	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 _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.	A. rise ; left B. rise ; right C. fall ; left D. fall ; right
9	Per Capita income is obtained by dividing National income by	A. Total labor Force in the country B. Unemployed Youth in the country C. Total population of that country D. None
10	The relation between M2 and inflation is tighter than the relation between M1 and inflation because.	A. M1 is larger than M2 B. The demand for M2 is more stable C. M1 includes more liquid assets the M2 D. None of the above answers is correct.

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

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.

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

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

An autonomous increase in money demand.

The function of money do not include.

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

An autonomous increase in the value of the domestic exchange rate.

When there is no change in central banking holding of international reserve balances a country's

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

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

The ____ lag for fiscal policy is generally _____ than it is for monetary policy.

Large difference is inflation rates among countries are almost always the result of large difference in.

In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

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.

Disposable income is obtained by subtracting ________ taxes from personal income

Fiscal policy refers to the manipulation of government income and expenditure to.

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

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

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Topic Test

Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

Share your comments & questions here

If the Federal reserve conducts open market __ the money supply _ shifting the LM curve to the right.

A decline in the money______ shifts the LM curve to the causing the interest rate to rise and output to fall.

The lag for fiscal policy is generally _ than it is for monetary policy.