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

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

Question # 2

A Political problem with discretionary fiscal policy is the.

Question # 3

Money is

Question # 4

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

Question # 5

By financial crowding our economists mean

Question # 6

A state of government bonds by the central bank should cause

Question # 7

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

Question # 8

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 9

When a government prints money to finance its expenditures it is likely to cause

Question # 10

Disposable income is obtained by subtracting ________ taxes from personal income

Question # 11

"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.

Question # 12

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

Question # 13

Fiscal policy refers to.

Question # 14

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Question # 15

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 # 16

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

Question # 17

The main source of interest profits for banks is.

Question # 18

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

Question # 19

The quantity of money demanded varies

Question # 20

An item designed as money that is intrinsically worthless could the.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
2 Disposable income is obtained by subtracting ________ taxes from personal income
A. Indirect taxes
B. Direct taxes
C. Subsidies
D. None
3 What's the most common way for a central bank to reduce the money supply.
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bounds from the government
D. Buy bonds from the public
4 By financial crowding our economists mean
A. What the government borrows cannot be used for private investment
B. Government borrowing drives up interest rates.
C. Bank of England controls on commercial bank lending
D. Credit rationing
5 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
6 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
7 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
8 There are _______ major instrument of monetary policy.
A. Three
B. Four
C. Five
D. None
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 Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.
A. Store of value
B. Medium of exchange
C. Standard of deferred payment
D. Unit of account

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