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

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Question # 1

Increasing the government budget deficit.

Question # 2

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

Question # 3

The main source of interest profits for banks is.

Question # 4

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 5

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 6

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

Question # 7

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

Question # 8

Which of the following measures is the best measure of money as a medium of exchange.

Question # 9

There are ______ methods of measuring GDP

Question # 10

Credit constitutes.

Question # 11

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 # 12

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Question # 13

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 14

As the interest sensitivity of money demand increases

Question # 15

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

Question # 16

a contractionary monetary policy

Question # 17

When the reserve requirement on checking deposits is 0.10 and the Federal Reserve purchases government securities values at Rs. 100,000, the MI money supply.

Question # 18

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

Question # 19

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 20

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
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
A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
2 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
A. up ; right
B. up ; left
C. down ;left
D. down ; right
3 The aggregate demand curve is downward sloping because a higher price level.
A. Makes people wealthier and so they spend more
B. Causes higher wages and so people spend more
C. Cuts the real value of income and so people spend less
D. Decreases the real supply of money decreasing spending.
4 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.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
5 A state of government bonds by the central bank should cause
A. Bond prices to rise
B. an increase in the supply of money
C. An increase in chartered banks loans
D. A decrease in reserves of the banking system.
6 Factors that cause the IS curve to shift include.
A. Changes in autonomous consumer spending
B. Changes in government spending
C. Changes in investment spending related to business confidence
D. All of the above
7 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.
A. rise ; left
B. rise ; right
C. fall ; left
D. fall ; right
8 The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.
A. Crowding out
B. Recognition lag
C. Public sector borrowing requirement
D. Fiscal drag
9 An increase in government spending 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 ; LM ;Left
C. fall ; IS ; Left
D. rise ; IS ;right
10 Identify the three motives of money demand.
A. Accumulative
B. Speculative precautionary
C. Speculative transaction precautionary
D. Precautionary special trisection

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