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

00:00
Question # 1

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

Question # 2

The intersection of the IS and LM curves captures.

Question # 3

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 # 4

During period of inflation

Question # 5

A sale of bonds by the central bank should cause.

Question # 6

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

Question # 7

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

Question # 8

The money multiple tells us teh ultimate increase in.

Question # 9

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

Question # 10

Automatic stabilizers

Question # 11

The Central Bank controls money and credit with the exception of.

Question # 12

As the interest sensitivity of money demand increases

Question # 13

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 14

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

Question # 15

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

Question # 16

Short run contractionary Fiscal policy would result in.

Question # 17

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

Question # 18

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

Question # 19

An expansionary monetary policy

Question # 20

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A 15% VAT is a.
A. Proportional income tax
B. Fixed excise duty
C. Ad valorem indirect tax
D. None of the above
2 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
3 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
4 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. Less ; higher ; output.
B. more ; higher ; output
C. less ; lower ; unplanned investment
D. more ; lower ; unplanned investment
5 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases
6 If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.
A. Pont Eo to point E1
B. Pont Eo to point E2
C. Pont Eo to point E3
D. Pont E3 to point E2
7 A major advantage of monetary over fiscal policy is that monetary policty.
A. Can be put into effect more quickly
B. Affects all sectors of the economy equally
C. Authorities are quicker to see the need for policy
D. Has a more direct and predictable impact on spending.
8 The main source of interest profits for banks is.
A. Checking account fees
B. Loans
C. Government securities
D. Savigng accounts
9 What is the significance of underestimating transactions money.
A. Monetary policy will be over simulating the economy
B. Monetary policy will be putting a drag on the economy
C. there is a need for money that the central bank should be meating.
D. The economy has too much money and there frore not enough spending.
10 Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.
A. Panel a
B. Panel b
C. Panel c
D. Panel d

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