PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	As the interest sensitivity of investment spending increase.	A. Monetary policy has a larger effect on output B. Fiscal policy has a larger effect on output C. The multiplier increases D. All of the above
2	The rate of which central bank lends to commercial banks is known as	A. reserve rate B. Discount rate C. Open market operation D. None
3	When a government prints money to finance its expenditures it is likely to cause	A. Unemployment B. Inflation C. Deflation D. Reductions in the use of barter
4	An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.	A. rise ; rise B. rise ; fall C. fall ; rise D. fall ; fall
5	If the central bank prints more 10 billion and spends them then as a direct result of this action.	A. M1 and M2 both increases B. Neighed M1 nor M2 increase C. M1 increase but M2 does not D. M2 increased but M1 does not.
6	Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.	A. Increase G by Rs.1,000 B. Decrease G by Rs.250 C. Increase G by less than Rs.100 D. Decrease G by more than Rs.250 but less than Rs.1000
7	During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.	A. Stimulate the economy and increase empolyment. B. Result in additional recessionary declines in employment and income C. Stimulator defiance spending D. Have an automatic stabilizing impact upon the economy
8	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
9	In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.	A. up ; left B. up ; right C. down ; left D. down ; right
10	Time lags which often erode effectiveness of monetary and fiscal policy measures represent.	A. The change in export and import price. B. Delays in the response of the economy to stabilization policy. C. The foreign response to price changes D. The change in exchang erates

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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

In economics money refers to

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

An increase in the money supply other thighs equal shifts the ______ curve to the

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

The rate of which central bank lends to commercial banks is known as

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.

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

"Transactions" money is money used as a

The opportunity cost of holding currency decreases when.

The equilibrium level of saving is.

Intermediate goods are meant for

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

The board pumps money out of the economy by

The IS curve shifts to the left when

There are _______ major instrument of monetary policy.

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

Large difference is inflation rates among countries are almost always the result of large difference in.

An expansionary monetary policy

An item designed as money that is intrinsically worthless could the.

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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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If the Federal reserve conducts open market __ the money supply _ shifting the LM curve to the right.

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _ relative to foreign goods and results in a in net exports.

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to ___ at any given interest rate and shifts the curve to the