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

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 2

If young busness professionals in Pakistan suddenly decide that driving japan made cars is an important status symbol net exports will tend to _____________causing aggregate demand to.

Question # 3

Fiscal policy refers to.

Question # 4

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 5

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 6

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Question # 7

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 8

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

Question # 9

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

Question # 10

Money and income are.

Question # 11

If the Central Bank wanted to decrease the quantity of money held by the public it would.

Question # 12

When your grandmother keeps her savings hidden under her mattress she is using money as.

Question # 13

To move from point E to point E1 is consistent with.

Question # 14

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.

Question # 15

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Question # 16

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

Question # 17

Knowledge of the money supply can lead to good predications of nominal GDP only

Question # 18

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

Question # 19

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

Question # 20

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Factors that cause the IS curve to shift include.
A. Changes in autonomous consumer spending
B. Changes in government spending
C. Changes in investment spending related to business confidence
D. All of the above
2 A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.
A. Reduce
B. Increase
C. Have no effect on
D. Double
3 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
4 An item designed as money that is intrinsically worthless could the.
A. A currency note
B. A silver coin
C. A barter item
D. Any tradeable commodity
5 When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.
A. Is unchaged
B. Increase by Rs.100,000
C. Increases by Rs. 1,000,000
D. None of these
6 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.
A. monetary ; monetary
B. monetary ; fiscal
C. fiscal ; monetary
D. fiscal ; fiscal
7 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.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
8 There are _______ major instrument of monetary policy.
A. Three
B. Four
C. Five
D. None
9 Intermediate goods are meant for
A. Direct use by the consumers
B. Further processing
C. The term do not exist
D. None
10 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

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