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

Question # 2

A monetary expansion is characterized by

Question # 3

The function of money do not include.

Question # 4

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 5

a contractionary monetary policy

Question # 6

The quantity of money demanded varies

Question # 7

A Political problem with discretionary fiscal policy is the.

Question # 8

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

Question # 9

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 # 10

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

Question # 11

If the demand for money increase relative to the supply of money

Question # 12

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 # 13

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

Question # 14

How do the banks gain from this corporate behavior.

Question # 15

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 # 16

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 17

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

Question # 18

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

Question # 19

The equilibrium level of saving is.

Question # 20

Short run contractionary Fiscal policy would result in.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 What happens to the money supply if the deficit is financed by selling bonds to the general public.
A. The money supply increaes
B. The money supply decreases
C. The money supply is unaffected
D. We cannot tell what will happen to the money supply
2 An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate
A. right ; falls
B. right ; rises
C. left ; falls
D. left ; rises
3 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
4 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
5 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
6 There are _______ major instrument of monetary policy.
A. Three
B. Four
C. Five
D. None
7 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
8 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
9 If the demand for money increase relative to the supply of money
A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
10 An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.
A. Cheaper ; decline
B. Cheaper ; rise
C. dearer ; decline
D. dearer ; rise

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