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

Try The 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

Fiscal policy refers to the manipulation of government income and expenditure to.

Question # 2

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 3

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 # 4

Commercial banks

Question # 5

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.

Question # 6

Factors that cause the IS curve to shift include.

Question # 7

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

Question # 8

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

Question # 9

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Question # 10

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.

Question # 11

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

Question # 12

The main source of interest profits for banks is.

Question # 13

A major advantage of monetary over fiscal policy is that monetary policy

Question # 14

"Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.

Question # 15

In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.

Question # 16

A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

Question # 17

The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.

Question # 18

Money and income are.

Question # 19

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Question # 20

The use of money is more efficient than barter because the introduction of money

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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
2 During period of inflation
A. Those people who have fixed incomes benefit
B. Every one's real income falls
C. those people who enter long term wage agreements benefit
D. Those people whose real income rises faster than the general price level benefit
3 The quantity of money demanded varies
A. Directly with both prices and output
B. Inversely with both prices and output
C. Directly with prices and inversely with output
D. Inversely with prices and directly with output
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 ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
5 Other things equal a decrease in autonomous consumption shifts the _____ curve to the
A. IS ; RIGHT
B. IS ; Left
C. LM ; Left
D. LF ; Right
6 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
7 The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.
A. Fiscal drag
B. The Laffer curve
C. Bracket creep
D. Debt burden
8 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 __________
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; Left
9 In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.
A. increases ; increase
B. increases ; decrease
C. decreases ; decreases
D. decreases ; increses
10 A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right

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