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

Question # 2

A monetary action consistent with the central bank selling bonds in the open market would be.

Question # 3

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 # 4

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

Question # 5

An expansionary monetary policy

Question # 6

Money is

Question # 7

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

Question # 8

Large difference is inflation rates among countries are almost always the result of large difference in.

Question # 9

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 10

What major advantage of monetary policy over fiscal policy does this clipping underline.

Question # 11

What's the most common way for a central bank to reduce the money supply.

Question # 12

In the Keynesian cross diagram a decline 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 # 13

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

Question # 14

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

Question # 15

There are _______ major instrument of monetary policy.

Question # 16

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

Question # 17

In economics money refers to

Question # 18

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

Question # 19

Weighted monetary aggregates

Question # 20

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
2 In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.
A. fiscal ; expansionary
B. fiscal ; contractionary
C. monetary ; expansionary
D. monetary ; contractionary
3 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
4 A change in the money supply has a greater effect upon equilibrium income.
A. The more interest sensitive private sector spending is.
B. The less interest sensitive private sector spending is.
C. The smaller the expenditure multiplier is
D. The more interest sensitive money holdings are to the rate of interest.
5 An example of discretionary fiscal policy would be.
A. The operation of the welfare sate
B. The operation of the processive federal income tax
C. A tax cut adopted to stimulate consumption
D. An interest rate out in plummeted to stimulate consumption
6 You move some of your savings account balance into your checking account.
A. M2 falls and M1 rises
B. M1 falls and M2 rises
C. M1 and M2 are unchanged
D. M1 rises and M2 remains unchanged
7 As a result of the increase in government expenditures disposable income increases by.
A. Rs.10 billion
B. Rs.9 billion
C. Rs.20 billion
D. Rs.5 billion
8 "The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.
A. Tax rates
B. The money supply
C. Aggregate demand
D. Government spending
9 Fiscal policy refers to.
A. The actions of the central bank in controlling the money supply
B. The government's altitude to taxation
C. The spending and taxing policies used by the government to influence the economy
D. The governments regulation of financial intermediaries.
10 If the central bank prints more 10 billion and spends them then as a direct result of this action.
A. M1 and M2 both increases
B. Neighed M1 nor M2 increase
C. M1 increase but M2 does not
D. M2 increased but M1 does not.

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