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

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

Question # 2

The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.

Question # 3

The IS curve shifts to the left when

Question # 4

Weighted monetary aggregates

Question # 5

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 6

"Some economists criticized the central bank for not moving in the face of the waning recovery One who prefers anonymity stated the failure to move today leaves us with low inflation a weak economy and climbing jobless claims these are classic signs of an impending downturn The fed fiddles while the economy burns This economist would want to see.

Question # 7

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

Question # 8

A business cycle refers to.

Question # 9

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

Question # 10

An increase in expected inflation is likely ot cause.

Question # 11

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 12

Which policies are expenditure changing policies.

Question # 13

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 14

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 15

According to Marshall the basis of consumer surplus is.

Question # 16

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

Question # 17

The ratio of debt to GDP will be larger

Question # 18

An autonomous increase in money demand.

Question # 19

A 15% VAT is a.

Question # 20

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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A state of government bonds by the central bank should cause
A. Bond prices to rise
B. an increase in the supply of money
C. An increase in chartered banks loans
D. A decrease in reserves of the banking system.
2 Money and income are.
A. Mirror image of each other
B. Two quite different concepts
C. Both measured as a per annum flow
D. Two ways of looking at the same thing.
3 A business cycle refers to.
A. Fluctuations in the general price level
B. changes in the long term growth pattern of the CPI
C. The ups and downs of real GDP
D. Fluctuations in the level of corporate.
4 Tax incidence is the
A. Ultimate distribution of a tax's burden
B. Measure of the inpat the tax has on employment and output
C.
Behavior of shifting the tax to another party
D. Structure of the tax
5 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
6 In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to
A. Increase ; increase
B. Increase ; decrease
C. decrees ; decrease
D. decrease ;Increase
7 You move some of your savings account balance into your checking account.
A. M2 falls and M1 rises
B. M1 falls and M2 rises
C. M1 and M2 are unchanged
D. M1 rises and M2 remains unchanged
8 An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
9 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 __________
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; Left
10 A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate
A. right ; fall
B. right ; rises
C. left ; falls
D. left ; rises

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