PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	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 fall and the IS curve to shift to the.	A. up ; left B. up ; right C. down ; left D. down ; right
2	By controlling the monetary base economists mean	A. Controlling the money multiplier B. Restricting the amount of cash in circulation C. Not allowing commercial banks to issue notes and coins D. making banks keep a certain % of their assets as M0
3	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
4	By financial crowding our economists mean	A. What the government borrows cannot be used for private investment B. Government borrowing drives up interest rates. C. Bank of England controls on commercial bank lending D. Credit rationing
5	The largest source of tax revenue for the federal government is.	A. The personal income tax B. The social security tax C. The property tax D. The sales tax
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	Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.	A. New classical economists B. Monetarists C. Marxists D. Keynesians
8	Money or paper currency serves at least _______ functions.	A. Three B. Four C. Five D. Seven
9	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
10	A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.	A. fall ; leftward B. rise ; leftward C. fall ; rightward D. rise ; rightward

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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

During period of inflation

Automatic stabilizers

As the interest sensitivity of money demand increases

The market price of bonds can fluctuate depending on

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

According to Marshall the basis of consumer surplus is.

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.

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

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

There are _______ major instrument of monetary policy.

If the Central Bank wanted to decrease the quantity of money held by the public it would.

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

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

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

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

The rate of which central bank lends to commercial banks is known as

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

The IS curve shifts to the left when

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.

The IMF is an agency charged with providing.

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

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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

If the Federal reserve conducts open market the money supply shifting LM curve to the left.

At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.