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

Automatic stabilizers

Question # 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

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

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

Question # 5

What is the significance of underestimating transactions money.

Question # 6

The budget deficit tends to decrease when

Question # 7

"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.

Question # 8

The government performs its redistribution function mainly through.

Question # 9

When considering any kind of economics indicator, prices are important because.

Question # 10

To move from point E to point E1 is consistent with.

Question # 11

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 12

As the required reserve ratio is decreased the money multiplier.

Question # 13

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 14

An increase in expected inflation is likely ot cause.

Question # 15

A decrease in the legal reserve ratio from 25% to 20% will

Question # 16

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

Question # 17

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

Question # 18

Monetary policy is concerned with influencing.

Question # 19

Which of the followig does not shift the IS curve .

Question # 20

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 If the nominal money supply doubles while real money demand is unchanged what happens to the price level.
A. The price level increases by a factor of four
B. The price level doubles
C. The price level is unchanged
D. The price level falls by one half.
2 As the interest sensitivity of investment spending increase.
A. Monetary policy has a larger effect on output
B. Fiscal policy has a larger effect on output
C. The multiplier increases
D. All of the above
3 If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.
A. Pont Eo to point E1
B. Pont Eo to point E2
C. Pont Eo to point E3
D. Pont E3 to point E2
4 A decrease in the legal reserve ratio from 25% to 20% will
A. Result in light money
B. Be contractionary
C. Increases excess reserves and the potential money multiplier
D. Decrease excess reserves and the potential money multiplier
5 The implementation lag for monetary policy is generally
A. Much longer than it is for fiscal policy
B. Unrelated to central bank action
C. The same as it is for fiscal policy
D. Much shorter than it is for fiscal policy.
6 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
7 A shift in tastes toward Pakistan goods ________ net exports and causes the IS curve to shift to the.
A. decreases ; right
B. decreases ; fall
C. increases ; rise
D. increases ; fall
8 Weighted monetary aggregates
A. Ignore the fact that some assets are more money like than others.
B. Are constructed by simply adding up the outstanding amounts of various types of asssets
C. Give greater weight to currency than to savings deposits
D. Value coins more than currency.
9 Employment tends to _______ whwn aggregate output.
A. rise, falls
B. rise ; rises
C. falls; rises
D. Not change ; falls
10 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase

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