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 IS curve to shift to the.

Question # 2

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

Question # 3

A 15% VAT is a.

Question # 4

The investment demand curve shows the relationship between the levels of.

Question # 5

The limit of an economy's total productive capacity at any given time is set by

Question # 6

Which of the following persons would be considered unemployed.

Question # 7

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 8

A change in the money supply has a greater effect upon equilibrium income.

Question # 9

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

Question # 10

During period of inflation

Question # 11

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

Question # 12

an asset that can easily be exchanged for goods and services is called a.

Question # 13

Employment tends to _______ whwn aggregate output.

Question # 14

Money is

Question # 15

Weighted monetary aggregates

Question # 16

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

Question # 17

If firms paying employees monthly began paying them weakly then the demand for money would.

Question # 18

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

Question # 19

Short run contractionary Fiscal policy would result in.

Question # 20

Net taxes are.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.
A. Milton Friedman
B. Ronald reagan
C. Margaret Thatcher
D. John Maynard Keynes
2 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
3 When your grandmother keeps her savings hidden under her mattress she is using money as.
A. a standard of deferred panyment
B. A comfortable thing for sleeping
C. A medium of exchange
D. A store of value
4 Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if
A. The IS curve shifts left ward
B. The IS curve shifts right ward
C. The money supply increase
D. Taxes are cut
5 Net taxes are.
A. Government expenditures minus government revenues.
B. Taxes paid by firms and households to the government minus the transfer payments made to firms and household.
C. Taxes paid by firms and household to the government plus transfer payments made to firms and hose holds.
D. Taxes paid by firms and hose hold to the government minus the cost of collecting the taxes.
6 As a result of the increase in government expenditures disposable income increases by.
A. Rs.10 billion
B. Rs.9 billion
C. Rs.20 billion
D. Rs.5 billion
7 A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.
A. fall ;LM; right
B. fall ;IS; Left
C. fall ;LM; Left
D. rise ;LM; Rifht
8 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
9 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
10 If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.
A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect its ambiguous
D. Money demand declines

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