PPSC Economics Topic 4 Monetary & Fiscal Policy

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

Try The 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.

Law of diminishing marginal utility. A
Law of equal marginal utility B
Law of proportions C
All of the above D

Question # 2

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

Revenue from value added tax A
Level of company profits B
Level of unemployment C
Average level of wages D

Question # 3

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

Productivity A
Real income growth B
The growth rates of real money demand C
The growth rates of nominal money supplies D

Question # 4

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 # 5

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a shift of the _ curve.

Left ward ; LM A
Right ; LM B
Left ward ; IS C
Left ward ; AD D

Question # 6

If the central Bank wished to Tighten money is would.

Lower the discount rate A
Sell government securities B
Lower the legal reserve ratio C
Lower the tax rate D

Question # 7

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to ______ at any given interest rate and shifts the _ curve to the ________

rise ; LM ;right A
rise ; IS ; right B
Fall ; LM ; left C
rise ;IS; Left D

Question # 8

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

demand ; right A
demand ; left B
supply ; right C
supply ; left D

Question # 9

What's the most common way for a central bank to reduce the money supply.

Collect higher taxes A
Sell bonds to the public B
Buy bounds from the government C
Buy bonds from the public D

Question # 10

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

more ; iincreases A
less ; increases B
more ; decreases C
more ; increases D

Question # 11

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

decreases ; rise A
decreases ; fall B
increases ; rise C
increases ; fall D

Question # 12

In the money market a condition of excess demand for money can be eliminated by a ______ in aggregate output or a in the interest rate both of which reduce the quantity of money demanded.

rise ; rise A
rise; fall B
fall ; rise C
fall ; fall D

Question # 13

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

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

Question # 14

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Weaken fiscal policy A
Avoid monetary policy errors B
Strengthen the impact of monetary policy C
Ensure the independence of the central bank D

Question # 15

in The Liquidity trap region

Fiscal policy is not effective A
Monetary policy is completely ineffective B
Monetary policy is completely effective C
Fiscal policy and monetary policy are equally effective D

Question # 16

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

decreases ; right A
decreases ; fall B
increases ; rise C
increases ; fall D

Question # 17

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

The cost of moderate inflation can be minimized by indexing the tax system and bonds A
that the cost of going to 0% is very low B
That moderate inflation increases money illusion C
Believe that moderate inflation aggravates the time inconsistency problem D

Question # 18

A Political problem with discretionary fiscal policy is the.

Contractionary bias A
Big state bias B
Expansionary bias C
Over reaction bias D

Question # 19

A business cycle refers to.

Fluctuations in the general price level A
changes in the long term growth pattern of the CPI B
The ups and downs of real GDP C
Fluctuations in the level of corporate. D

Question # 20

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

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

According to Marshall the basis of consumer surplus is.

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

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

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.

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

If the central Bank wished to Tighten money is would.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

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

What's the most common way for a central bank to reduce the money supply.

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

in The Liquidity trap region

A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.

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

A Political problem with discretionary fiscal policy is the.

A business cycle refers to.

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

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Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a shift of the _ curve.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to ______ at any given interest rate and shifts the _ curve to the ________

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

When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

In the money market a condition of excess demand for money can be eliminated by a ______ in aggregate output or a in the interest rate both of which reduce the quantity of money demanded.