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

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 2

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 # 3

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

Question # 4

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 5

The function of money do not include.

Question # 6

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 fall and the IS curve to shift to the.

Question # 7

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

Question # 8

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

Question # 9

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Question # 10

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

Question # 11

Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.

Question # 12

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

Question # 13

The IMF is an agency charged with providing.

Question # 14

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

Question # 15

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 # 16

As the required reserve ratio is decreased the money multiplier.

Question # 17

A monetary expansion is characterized by

Question # 18

Which of the following is not an important variable in growth accounting calculations.

Question # 19

If the original money supply is MSo and the original demand for money is MDo then

Question # 20

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Weighted monetary aggregates
A. Ignore the fact that some assets are more money like than others.
B. Are constructed by simply adding up the outstanding amounts of various types of asssets
C. Give greater weight to currency than to savings deposits
D. Value coins more than currency.
2 Disposable income is obtained by subtracting ________ taxes from personal income
A. Indirect taxes
B. Direct taxes
C. Subsidies
D. None
3 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls
4 An increase in expected inflation is likely ot cause.
A. A decline in the demand for real balances
B. an increase in the demand for real balances.
C. No change i the demand for real balances
D. No change in the demand for real balances only of the income elasticity of real money demand is zero.
5 The purpose of fiscal policy is to
A. Alter the direction of the economy
B. Change people's attitudes toward governemnt
C. Educate people as to the importance of economics
D. Offer insight into the way thing work
6 Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when
A. k increases and h increase
B. k increases and h decrease
C. k decrease and h increase
D. k decrease and h decrease
7 If the original money supply is MSo and the original demand for money is MDo then
A. The equilibrium interest rate and savings are 5% and 50
B. The money supply is 200 and equilibrium income is 500
C. The equilibrium interest rate and income are 5% and 600
D. The speculative demand is 25
8 If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.
A. Purchases ; decreases
B. sales ; increases
C. purchases ; increases
D. sales ; decreases
9 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
10 The government performs its redistribution function mainly through.
A. Trade practice legislation against anticipative behavior
B. The provision of public goods
C. Taxes and transfer payments
D. Tariffs on imports

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