PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Fiscal policy is purposeful movements in _____designed to direct an economy	A. Interest rate B. Legal structures C. Government regulations D. D Government spending and taxes
2	Fiscal policy refers to the manipulation of government income and expenditure to.	A. control the volume and price of money B. Limit the rate of increaes in incomes C. Effect the value of the dollar on world financial market. D. Affect the level of total expenditure output and employment
3	The main source of interest profits for banks is.	A. Checking account fees B. Loans C. Government securities D. Savigng accounts
4	The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.	A. To eliminate seignior age B. To allow open market operations C. To enhance the credibility of monetary policy. D. None of the above
5	The relation between M2 and inflation is tighter than the relation between M1 and inflation because.	A. M1 is larger than M2 B. The demand for M2 is more stable C. M1 includes more liquid assets the M2 D. None of the above answers is correct.
6	Which of the followig does not shift the IS curve .	A. An increases in autonomous consumption B. An increase in government spending. C. A decline in government spending D. A fall in theinterest rate
7	Knowledge of the money supply can lead to good predications of nominal GDP only	A. If the price level is stable B. If the money supply is stable C. Over very short periods of time D. If the determinants of velocity are known
8	An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate	A. right ; falls B. right ; rises C. left ; falls D. left ; rises
9	Large difference is inflation rates among countries are almost always the result of large difference in.	A. Productivity B. Real income growth C. The growth rates of real money demand D. The growth rates of nominal money supplies
10	Which of the following persons would be considered unemployed.	A. a house wife B. A person who worked more than 20 hours in a family owned business C. A 15 years old looking for summer employment D. A recent college graduate looking for her fist job

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

According to the Laffer curve as tax rates increase tax revenues.

"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.

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

Money or paper currency serves at least _______ functions.

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

"Far better for central bankers to get out of the fine tuning business instead they should d try to keep.

The IS curve shifts to the left when

Credit constitutes.

By financial crowding our economists mean

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 major advantage of monetary over fiscal policy is that monetary policty.

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

A business cycle refers to.

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

Which of the followig does not shift the IS curve .

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

The opportunity cost of holding currency decreases when.

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

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

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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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

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During the early years of the Great depression there was a significant decrees n the the money supply that causes. the __ to shift