PPSC Economics Topic 4 Monetary & Fiscal Policy

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zaheer hussain 18 - Jan - 2024 14 Min 06 Sec 11/20
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Mahnoor NaSir 24 - May - 2022 07 Min 27 Sec 9/20

PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if	A. The IS curve shifts left ward B. The IS curve shifts right ward C. The money supply increase D. Taxes are cut
2	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
3	As the required reserve ratio is decreased the money multiplier.	A. Could either increase or decrease B. Remains the same as long as banks hold no excess reserves C. Increase D. Decreases
4	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
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	Which of the following would qualify as an aggregate demand shocks.	A. An unexpected increase in oil prices B. A seasonally expected increase in oil prices C. An unexpected reduction in consumer confidence D. an anticipated tax cut
7	Which of the followig does not shift the IS curve .	A. An increases in autonomous consumption B. An increase in government spending. C. A decline in government spending D. A fall in theinterest rate
8	The budget deficit tends to decrease when	A. GDP increases B. GDP decreases rapidly C. GDP remains unchanged D. GDP decreases slightly
9	Which of the following causes M1 demand to decrease.	A. A fall in the tax rate B. An increase in income C. A fall in the interest rate D. An increase in the use of credit cards
10	Which policies are expenditure changing policies.	A. Currency devaluation and revaluation B. Import quotas and tariffs C. Monetary and fiscal policy D. Wage and price controls

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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

Monetary policy is concerned with influencing.

If a perfectly competitive industry is in long run equilibrium all firms will

A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate

The main role of the Federal Reserve is to

There are ______ methods of measuring GDP

an asset that can easily be exchanged for goods and services is called a.

As the interest sensitivity of investment spending increase.

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

Identify the three motives of money demand.

According to the supply side model a reduction in the tax rate.

"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.

An autonomous increase in the value of the domestic exchange rate.

The function of money do not include.

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 __________

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

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 ______l and the IS curve Curve to shift to the.

If firms paying employees monthly began paying them weakly then the demand for money would.

A monetary expansion is characterized by

The main source of interest profits for banks is.

in The Liquidity trap region

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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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An autonomous rise in __ note causes by a change in the price level aggregate output of the interest shifts the _ curve to the

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 __________

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 __l and the IS curve Curve to shift to the.