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

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 2

The main role of the Federal Reserve is to

Question # 3

Knowledge of the money supply can lead to good predications of nominal GDP only

Question # 4

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 5

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 6

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

Question # 7

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 # 8

The purpose of financial intermediaries is.

Question # 9

As the required reserve ratio is decreased the money multiplier.

Question # 10

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

Question # 11

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 rise and the IS curve to shift to the

Question # 12

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

Question # 13

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 14

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

Question # 15

An increase in spending those results from expansionary _______ policy cause the interest rate to.

Question # 16

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

Question # 17

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

Question # 18

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 19

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

Question # 20

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The real money demand doubles while the nominal money supply is unchanged what happens to the price level.
A. The price level increase by a factor of four
B. The price level doubles
C. The price level is unchanged
D. The price level falls by one half.
2 An increase in autonomous consumer expenditure causes the equilibrium levelof 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
3 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
4 In the money market a condition of excess supply of money cna be eliminated by a _________ in aggregate output or a __ in the interest rate , both of which increase the quantity of money demanded.
A. rise ; rise
B. rise ; fall
C. fall ; rise
D. fall ; fall
5 The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.
A. Bank's line of credit
B. Reserve ratio
C. Current ratio
D. Money multipiler
6 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.
7 in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right
8 In the Keynesian corss diagram, and cline 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. up ; left
B. up ; right
C. down ; left
D. down ; right
9 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
10 When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.
A. more ; iincreases
B. less ; increases
C. more ; decreases
D. more ; increases

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