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

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

Question # 2

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

Question # 3

Which of the following persons would be considered unemployed.

Question # 4

Identify the three motives of money demand.

Question # 5

The intersection of the IS and LM curves captures.

Question # 6

A bank has excess liquidity reserves to lend but is unable to find a willing borrower these will_______ the size of the money multiplier.

Question # 7

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 8

The largest source of tax revenue for the federal government is.

Question # 9

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.

Question # 10

As the required reserve ratio is decreased the money multiplier.

Question # 11

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

Question # 12

The board pumps money out of the economy by

Question # 13

Intermediate goods are meant for

Question # 14

In economics money refers to

Question # 15

An autonomous increase in the value of the domestic exchange rate.

Question # 16

The aggregate demand curve is downward sloping because a higher price level.

Question # 17

in The Liquidity trap region

Question # 18

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

Question # 19

Employment tends to _______ whwn aggregate output.

Question # 20

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Per Capita income is obtained by dividing National income by
A. Total labor Force in the country
B. Unemployed Youth in the country
C. Total population of that country
D. None
2 The limit of an economy's total productive capacity at any given time is set by
A. The amount of money in circulation
B. Business demand for goods and services
C. The level of government spending and taxation
D. the quantity and quality of its productive resources
3 An expansionary monetary policy
A. Reduces interest rates
B. Increases real output
C. Shifts the LM curve to the right
D. All of the above
4 A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
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 Identify the three motives of money demand.
A. Accumulative
B. Speculative precautionary
C. Speculative transaction precautionary
D. Precautionary special trisection
7 In the Keynesian cross diagram a decline 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
A. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right
8 Why do people keep currency in their pockets when bank deposits pay interest.
A. Because banks might steal your money
B. Because currency is more liquid
C. Because bank deposits lose value due to inflation
D. Because bank deposits lose value due to exchange in interest rates.
9 Which of the following causes M1 demand is decrease.
A. A fall in the tax rate
B. An increase in income
C. A fall in the interest rate
D. An increase in the use of credit cards
10 The ratio of debt to GDP will be larger
A. The lower the real interest rate
B. The lower the growth rate of output
C. The lower the in initial debt ratio
D. The lower the ratio of the primary deficit to GDP

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