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

An expansionary monetary policy

Question # 2

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

Question # 3

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

Question # 4

As the interest sensitivity of investment spending increase.

Question # 5

An autonomous increase in money demand.

Question # 6

The quantity of money demanded varies.

Question # 7

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

Question # 8

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

Question # 9

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 10

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 11

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

Question # 12

To move from point E to point E1 is consistent with.

Question # 13

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

Question # 14

The relation between M2 and inflation is tighter than the relation between M1 and inflation because.

Question # 15

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.

Question # 16

During period of inflation

Question # 17

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.

Question # 18

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

Question # 19

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 20

Weighted monetary aggregates

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.
A. An upward stopping LM curve
B. A downward sloping L curve
C. A downward sloping IS curve
D. The circular flow of money in the economy.
2 Monetary policy can affect output.
A. this statement is always true
B. This statements always false
C. This statement is true only in the short run
D. This statement is true only in the medium run and the long run
3 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
4 To move from point E to point E1 is consistent with.
A. Expectations of a constant price level
B. Adaptive expectations that have no adjustment for the period immediately following a change in the actual price
C. Rational expectations and NCM
D. A and B
5 Total utility of a commodity is measured by which price of that commodity.
A. Value in use.
B. Value in exchange
C. Both of above
D. None of above
6 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
7 The automatic stabilization function of fiscial policy ensures that government expenditures _________ and government revenues __ during recessions.
A. decrease ; decrease
B. decrease ; increase
C. Increase ; decrease
D. increase ; increase
8 A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.
A. Increases ; increases ; right
B. Increases ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; right
9 Which of the following events will lead to a decrease in the demand for money.
A. An increase in the level of aggregate output.
B. A decrease in the supply of money
C. A decrease in the interest rate
D. a decrease in the price level
10 a contractionary monetary policy
A. Reduces interest rtes
B. Reduces real output
C. shifts the LM curve to the right
D. All of the above

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