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

According to Marshall the basis of consumer surplus is.

Question # 2

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

Question # 3

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

Question # 4

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

Question # 5

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

Question # 6

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

Question # 7

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

Question # 8

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

Question # 9

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

Question # 10

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

Question # 11

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 12

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

Question # 13

An increase in expected inflation is likely ot cause.

Question # 14

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

Question # 15

The aggregate demand curve is downward sloping because a higher price level.

Question # 16

Which of the following measures is the best measure of money as a medium of exchange.

Question # 17

By financial crowding our economists mean

Question # 18

The opportunity cost of holding currency decreases when.

Question # 19

The implementation lag for monetary policy is generally

Question # 20

A business cycle refers to.

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Sr.# Question Answer
1 When there is no change in central banking holding of international reserve balances a country's
A. Trae balance always equals 0
B. Current account balance always equals 0
C. Capital account balance always equals 0
D. Balance of payments always equal 0
2 There are _______ major instrument of monetary policy.
A. Three
B. Four
C. Five
D. None
3 Which policies are expenditure changing policies.
A. Currency devaluation and revaluation
B. Import quotas and tariffs
C. Monetary and fiscal policy
D. Wage and price controls
4 Other things equal a decrease in autonomous consumption shifts the _____ curve to the
A. IS ; RIGHT
B. IS ; Left
C. LM ; Left
D. LF ; Right
5 An expansionary monetary policy
A. Reduces interest rates
B. Increases real output
C. Shifts the LM curve to the right
D. All of the above
6 An increase in spending those results from expansionary _______ policy cause the interest rate to.
A. fiscal ; rise
B. fiscal ; fall
C. incomes ; rise
D. income ; fall
7 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
8 The main role of the Federal Reserve is to
A. Administer the government on the state of the economy
B. Overses the operations of the financial system and monetary management.
C. Establish the value of the dollar and official interest rates
D. Provide advice to the government on the state of the economy.
9 A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
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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