PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to	A. increase ; increase B. Increase ; decrease C. decrease ; decrease D. decrease ; increase
2	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
3	A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the	A. decreases ; right B. decrease ; left C. increase ; right D. increases ; left
4	Which of the following persons would be considered unemployed.	A. a house wife B. A person who worked more than 20 hours in a family owned business C. A 15 years old looking for summer employment D. A recent college graduate looking for her fist job
5	The IS curve shifts to the left when	A. Taxes increase B. Government spending increase C. The money supply increases D. All of the above occur
6	An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____	A. A movement along the AS curve cost push inflation B. A leftward shift int he AS curve demand pull inflation. C. A right ward shift in the AS Curve cost push inflation D. a left ward shift in the AS curve cost push inflation
7	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
8	An autonomous increase in the value of the domestic exchange rate.	A. Increases output net exports and the interest rate. B. Decreases output net exports and the interest rate C. Decreases output and net exports and increases the interest rate. D. Increase output and decreases net exports and the interest rate.
9	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
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

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

The near term effect of an unexpected sale of bonds by the central bank is.

A decrease in the legal reserve ratio from 25% to 20% will

The purpose of financial intermediaries is.

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

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

What is the significance of underestimating transactions money.

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

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Why do people keep currency in their pockets when bank deposits pay interest.

Factor that cause the IS curve to shift include.

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 change in the money supply has a greater effect upon equilibrium income.

Those who favor setting the target rate of inflation at about 3% believe.

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

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.

What happens to the money supply if the deficit is financed by selling bonds to the central bank.

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

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.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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Set 5

Set 6

Set 7

Set 8

Set 9

Set 10

Set 11

Set 12

Set 13

Set 14

Topic Test

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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When the central Bank ____ the money supply the LM curve shifts to the _ interest rates __________ and equilibrium aggregate output.

A reduction in government spending causes the equilibrium level of aggregate output to ___ at any given interest rate and shifts the curve to the.

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.