PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.	A. Money demand declines first then rises when inflation increases B. Money demand rises C. The overall effect is ambiguous D. Money demand declines
2	The equilibrium level of saving is.	A. Rs.120 B. Rs.75 C. Rs.40 D. Rs.80
3	Fiscal policy refers to the manipulation of government income and expenditure to.	A. control the volume and price of money B. Limit the rate of increaes in incomes C. Effect the value of the dollar on world financial market. D. Affect the level of total expenditure output and employment
4	During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____	A. LM ; rightward B. IS ; rightwards C. LM ; Leftward D. IS ; Leftward
5	A change in the money supply has a greater effect upon equilibrium income.	A. The more interest sensitive private sector spending is. B. The less interest sensitive private sector spending is. C. The smaller the expenditure multiplier is D. The more interest sensitive money holdings are to the rate of interest.
6	In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.	A. monetary ; monetary B. monetary ; fiscal C. fiscal ; monetary D. fiscal ; fiscal
7	Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.	A. Positively ; positively B. Positively ; negatively C. negatively ; positively D. negatively ; negatively
8	Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.	A. Panel a B. Panel d C. Panel b D. Panel e
9	Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.	A. Reduce a balance of payments surplus B. Reduce a balance of payments deficit C. Increases both imports and exports D. Decrease both imports and exports
10	What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.	A. The multiplier B. The money multiplier C. Required reserve ratio D. Open market operations

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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

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

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

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.

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

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.

Why would corporations want to achieve zero balances in their checking accounts.

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Which of the following events will lead to a decrease in the demand for money.

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.

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

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

using money as a medium of exchange.

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

You move some of your savings account balance into your checking account.

When considering any kind of economics indicator, prices are important because.

Identify the three motives of money demand.

A business cycle refers to.

The limit of an economy's total productive capacity at any given time is set by

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

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Topic Test

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

PPSC Economics Chapter 4 Important MCQ's

Test Questions

Share your comments & questions here

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

If Federal reserve conducts open market sales, the money supply _ shifting the LM curve to the___

At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.