PPSC Economics Topic 4 Monetary & Fiscal Policy

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

To move from point E to point E1 is consistent with.

Expectations of a constant price level A
Adaptive expectations that have no adjustment for the period immediately following a change in the actual price B
Rational expectations and NCM C
A and B D

Question # 2

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

k increases and h increase A
k increases and h decrease B
k decrease and h increase C
k decrease and h decrease D

Question # 3

The market price of bonds can fluctuate depending on

How many bonds were sold A
Who bought the bonds B
The amount of the coupon C
The interest rate D

Question # 4

If the central bank prints more 10 billion and spends them then as a direct result of this action.

M1 and M2 both increases A
Neighed M1 nor M2 increase B
M1 increase but M2 does not C
M2 increased but M1 does not. D

Question # 5

The IS curve shifts to the left when

Taxes increase A
Government spending increase B
The money supply increases C
All of the above occur D

Question # 6

Automatic stabilizers

Counter balance fluctuations in economic activity. A
Reinforce fluctuations in economic activity B
Do not occur when the economy falls into recession C
Reduces the size of the deflationary gap D

Question # 7

An autonomous increase in money demand.

Shift the IS curve to the right A
Shifts the IS curve to the left B
Shift the LM curve to the right C
Shift the LM curve to the left D

Question # 8

The opportunity cost of holding currency decreases when.

Income decreases A
The interest rate on bonds decrease B
Buying newly issued government bonds directly from the central bank C
Buying newly issued government bonds directly to the central bank. D

Question # 9

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

0.25 A
4 B
0.4 C
Rs.4 billion D

Question # 10

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

M1 is larger than M2 A
The demand for M2 is more stable B
M1 includes more liquid assets the M2 C
None of the above answers is correct. D

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

up ; right A
up ; left B
down ;left C
down ; right D

Question # 12

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Milton Friedman A
Ronald reagan B
Margaret Thatcher C
John Maynard Keynes D

Question # 13

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

IS ;right A
IS ;Left B
LM ; Left C
LM ; Right D

Question # 14

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

The more interest sensitive private sector spending is. A
The less interest sensitive private sector spending is. B
The smaller the expenditure multiplier is C
The more interest sensitive money holdings are to the rate of interest. D

Question # 15

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

Sell government securities on the open market. A
Reduce the minimum reserve asset ratio B
Buy government securities on the open market. C
Lower interest rates D

Question # 16

An autonomous rise in __ note causes by a change in the price level aggregate output of the interest shifts the _ curve to the

Net exports LM right A
Net exports LM left B
Money demand IS right C
Money demand LM left D

Question # 17

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Income growth A
Unemployment B
Money growth C
Taxes D

Question # 18

Which policies are expenditure changing policies.

Currency devaluation and revaluation A
Import quotas and tariffs B
Monetary and fiscal policy C
Wage and price controls D

Question # 19

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.

up ; rise A
up ; fall B
down ; rise C
down ; fall D

Question # 20

Identify the three motives of money demand.

Accumulative A
Speculative precautionary B
Speculative transaction precautionary C
Precautionary special trisection D

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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

To move from point E to point E1 is consistent with.

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

The market price of bonds can fluctuate depending on

If the central bank prints more 10 billion and spends them then as a direct result of this action.

The IS curve shifts to the left when

Automatic stabilizers

An autonomous increase in money demand.

The opportunity cost of holding currency decreases when.

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

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

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

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

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

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

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Which policies are expenditure changing policies.

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.

Identify the three motives of money demand.

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An autonomous rise in __ note causes by a change in the price level aggregate output of the interest shifts the _ curve to the