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

00:00
Question # 1

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

Question # 2

In the Keynesian corss diagram, and cline 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 # 3

During period of inflation

Question # 4

An example of discretionary fiscal policy would be.

Question # 5

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

Question # 6

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.

Question # 7

The implementation lag for monetary policy is generally

Question # 8

Weighted monetary aggregates

Question # 9

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 10

The purpose of fiscal policy is to

Question # 11

If the central bank prints more 10 billion and spends them then as a direct result of this action.

Question # 12

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Question # 13

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

Question # 14

The investment demand curve shows the relationship between the levels of.

Question # 15

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 ______ and the equilibrium level of aggregate output to ______

Question # 16

Money or paper currency serves at least _______ functions.

Question # 17

Monetary policy is concerned with influencing.

Question # 18

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 19

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

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 Which of the following measures is the best measure of money as a medium of exchange.
A. M1
B. M2
C. M3
D. None of the above
3 According to Marshall the basis of consumer surplus is.
A. Law of diminishing marginal utility.
B. Law of equal marginal utility
C. Law of proportions
D. All of the above
4 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.
A. Fiscal drag
B. The Laffer curve
C. Bracket creep
D. Debt burden
5 An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.
A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages
6 Under system fixed exchange rates which of the following policies promotes internal balance for a nation.
A. Fiscal policy
B. Monetary policy
C. Both fiscal policy and monetary policy
D. Neither fiscal policy nor monetary policy
7 When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.
A. Increase ; right ; fall; increase
B. increases ; left ; rise ; decrease
C. decreases ; left ;rise ; increases
D. decreases ; left ; fall ; increases
8 According to the supply side model a reduction in the tax rate.
A. Could reduce the size of any budget deficit
B. Would have no effect on output
C. Would have no effect on consumption
D. None of the above
9 An increase in spending those results from expansionary _______ policy cause the interest rate to.
A. fiscal ; rise
B. fiscal ; fall
C. incomes ; rise
D. income ; fall
10 If firms paying employees monthly began paying them weakly then the demand for money would.
A. Rise and income would rise
B. Rise and income would fall
C. Fall and income would rise
D. Fall and income would fall

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