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

00:00
Question # 1

Factors that cause the IS curve to shift include.

Question # 2

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

Question # 3

If the Central Bank wanted to decrease the quantity of money held by the public it would.

Question # 4

An expansionary monetary policy

Question # 5

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

Question # 6

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.

Question # 7

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

Question # 8

Which of the following would qualify as an aggregate demand shocks.

Question # 9

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

Question # 10

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 11

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

Question # 12

The function of money do not include.

Question # 13

An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____

Question # 14

As a result of the increase in government expenditures disposable income increases by.

Question # 15

By financial crowding our economists mean

Question # 16

The investment demand curve shows the relationship between the levels of.

Question # 17

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

Question # 18

During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.

Question # 19

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

Question # 20

a contractionary monetary policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 What is the significance of underestimating transactions money.
A. Monetary policy will be over simulating the economy
B. Monetary policy will be putting a drag on the economy
C. there is a need for money that the central bank should be meating.
D. The economy has too much money and there frore not enough spending.
2 Why do people keep currency in their pockets when bank deposits pay interest.
A. Because banks might steal your money
B. Because currency is more liquid
C. Because bank deposits lose value due to inflation
D. Because bank deposits lose value due to exchange in interest rates.
3 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
4 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
5 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
6 If the Central Bank wanted to decrease the quantity of money held by the public it would.
A. Sell government securities
B. Buy government securities
C. Lower the legal reserve requirement
D. Raise taxes
7 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.
8 "The earlier predictions underestimated currency in circulation and treasury balances at the Fed, both of which drained reserves from the banking system" Lower reserves means.
A. Lower interest rates
B. Lower money supply
C. Lower unemployment
D. Higher inflation
9 A decrease iin money demand other thing equal shifts the _____ curve to the
A. IS ; right
B. Is ; Left
C. LM ; Left
D. LM ; Rfight
10 A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left

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