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

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Question # 1

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 2

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

Question # 3

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

Question # 4

The situation in which the imports are greater than exports is termed as.

Question # 5

A sale of bonds by the central bank should cause.

Question # 6

The IS curve shifts to the left when

Question # 7

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

Question # 8

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

Question # 9

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 10

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 ______ and the equilibrium level of aggregate output to ______

Question # 11

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

Question # 12

" A growing number of economists view the Fed's new willingness to take on more of the nation's debt as inflationary in the long run." This inflation worry is because.

Question # 13

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.

Question # 14

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 # 15

The implementation lag for monetary policy is generally

Question # 16

A decrease iin money demand other thing equal shifts the _____ curve to the

Question # 17

If the demand for money increase relative to the supply of money

Question # 18

A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.

Question # 19

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 20

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

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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 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls
3 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.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply
4 A business cycle refers to.
A. Fluctuations in the general price level
B. changes in the long term growth pattern of the CPI
C. The ups and downs of real GDP
D. Fluctuations in the level of corporate.
5 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 ; rightward
B. IS ; rightwards
C. LM ; Leftward
D. IS ; Leftward
6 A good that is used as a medium of exchange as well as being a consumption good is called.
A. A barter money
B. A commodity money
C. A legal tender
D. A debased money
7 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
8 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
9 "A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.
A. Upward
B. Down ward
C. To be zero
D. To match inflation
10 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

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