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

00:00
Question # 1

How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.

Question # 2

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 3

Those who favor setting the target rate of inflation at about 3% believe.

Question # 4

An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise

Question # 5

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

Question # 6

The IS curve shifts to the left when

Question # 7

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

Question # 8

Factor that cause the IS curve to shift include.

Question # 9

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.

Question # 10

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

Question # 11

Which of the following part of M1

Question # 12

"The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.

Question # 13

The implementation lag for monetary policy is generally

Question # 14

Why do people keep currency in their pockets when bank deposits pay interest.

Question # 15

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 __________

Question # 16

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

Question # 17

In the Keynesian cross diagram an increasing investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift _____ and the equilibrium level of aggregate output to.

Question # 18

The quantity of money demanded varies.

Question # 19

Monetary policy is concerned with influencing.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The market price of bonds can fluctuate depending on
A. How many bonds were sold
B. Who bought the bonds
C. The amount of the coupon
D. The interest rate
2 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
3 The quantity of money demanded varies.
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
4 Which of the following would qualify as an aggregate supply shock.
A. An unexpected increase in oil prices
B. Seasonally expected increase in oil prices
C. An unexpected reduction in consumer confidence
D. an anticipated tax cut
5 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
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 The function of money do not include.
A. an exchange of purchasing power
B. A unit of account
C. A medium of exchange
D. A store of value
8 You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.
A. If you live in a 1st best world.
B. If you live in a 2nd best world
C. If the tax rates on some of the items are prohibitively high
D. Either of the above
9 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
10 A monetary action consistent with the central bank selling bonds in the open market would be.
A. An increase in the reserve ratio
B. A reduction in the discount rate of interest
C. An increase in government spending.
D. a reduction in excise taxes

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