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

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

Question # 2

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 3

There are ______ methods of measuring GDP

Question # 4

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

Question # 5

There are _______ major instrument of monetary policy.

Question # 6

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.

Question # 7

"The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.

Question # 8

During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.

Question # 9

The situation in which the imports are greater than exports is termed as.

Question # 10

An increase in expected inflation is likely ot cause.

Question # 11

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 12

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

Question # 13

using money as a medium of exchange.

Question # 14

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

Question # 15

A major advantage of monetary over fiscal policy is that monetary policty.

Question # 16

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 17

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

Question # 18

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 19

The ratio of debt to GDP will be larger

Question # 20

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

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PPSC 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 of the five would monetary policy be the weakest.
A. Panel a
B. Panel d
C. Panel b
D. Panel e
3 A monetary expansion is characterized by
A. Rising output and interest rates
B. Rising output and falling interest rates.
C. Constant output and falling interest rates
D. Falling output and interest rates
4 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
5 If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.
A. Purchases ; decreases
B. sales ; increases
C. purchases ; increases
D. sales ; decreases
6 Fiscal policy refers to the manipulation of government income and expenditure to.
A. control the volume and price of money
B. Limit the rate of increaes in incomes
C. Effect the value of the dollar on world financial market.
D. Affect the level of total expenditure output and employment
7 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 _______
A. rise; Lm ; RIGHT
B. RISE ; is; right
C. fall ; IS; Left
D. rise ; LM; left
8 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
9 During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.
A. Stimulate the economy and increase empolyment.
B. Result in additional recessionary declines in employment and income
C. Stimulator defiance spending
D. Have an automatic stabilizing impact upon the economy
10 As a result of the increase in government expenditures disposable income increases by.
A. Rs.10 billion
B. Rs.9 billion
C. Rs.20 billion
D. Rs.5 billion

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