PPSC Economics Topic 4 MCQS Test Preparation

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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

Which of the following persons would be considered unemployed.

Question # 2

Which of the following part of M1

Question # 3

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

Question # 4

Commercial banks

Question # 5

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to fall and the IS curve to shift to the.

Question # 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

Question # 7

If the central Bank wished to Tighten money is would.

Question # 8

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

Question # 9

Which of the following causes M1 demand is decrease.

Question # 10

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 # 11

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

Question # 12

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 __________

Question # 13

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

Question # 14

An expansionary monetary policy

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

in The Liquidity trap region

Question # 17

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 18

In the Keynesian cross diagram an increasing investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to rise and the IS curve to shift to the

Question # 19

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 # 20

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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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.
A. Raises ; LM; Right
B. Lowers; IS ; left
C. raises ; IS; right
D. Lower ; LM; left
2 A Political problem with discretionary fiscal policy is the.
A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias
3 The intersection of the IS and LM curves captures.
A. The equilibrium of the demand and supply sides of the economy
B. the equivalence of monetary and fiscal policy
C. Joint equilibrium in the goods and money markets
D. All of the above
4 One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
5 A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; right
6 Time lags which often erode effectiveness of monetary and fiscal policy measures represent.
A. The change in export and import price.
B. Delays in the response of the economy to stabilization policy.
C. The foreign response to price changes
D. The change in exchang erates
7 The rate of which central bank lends to commercial banks is known as
A. reserve rate
B. Discount rate
C. Open market operation
D. None
8 A decrease in fully autonomous investment other things equal shifts the ______ curve to the
A. IS ; right
B. IS ; Left
C. LM ; Left
D. LM ; right
9 "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.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
10 The board pumps money out of the economy by
A. Buying bonds
B. Selling bond
C. Creating cash
D. Lowering the reserve requirements.

Test Questions