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

Tax incidence is the

Question # 2

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

Question # 3

In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded.

Question # 4

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

Question # 5

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 # 6

An expansionary monetary policy

Question # 7

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

Question # 8

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

Question # 9

There are _______ major instrument of monetary policy.

Question # 10

Which of the followig does not shift the IS curve .

Question # 11

The main role of the Federal Reserve is to

Question # 12

Which of the following would qualify as an aggregate demand shocks.

Question # 13

According to Marshall the basis of consumer surplus is.

Question # 14

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 # 15

What happens to the money supply if the deficit is financed by selling bonds to the general public.

Question # 16

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

Question # 17

Which of the following is not an important variable in growth accounting calculations.

Question # 18

There are ______ methods of measuring GDP

Question # 19

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

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Which of the following part of M1
A. Stock negotiating accounts
B. Automatic transfer system accounts
C. Negotiable orders of withdrawal accounts
D. Demand deposits of mutual saving banks.
2 The equilibrium level of income is.
A. Rs. 360
B. Rs.600
C. Rs.440
D. Rs.500
3 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.
4 An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the
A. right ; left
B. right ; right
C. left ; left
D. left ; right
5 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
6 If the Central Bank wanted to decrease the quantity of money held by the public it would.
A. Sell government securities
B. Buy government securities
C. Lower the legal reserve requirement
D. Raise taxes
7 The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.
A. An upward stopping LM curve
B. A downward sloping L curve
C. A downward sloping IS curve
D. The circular flow of money in the economy.
8 When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.
A. 0.25
B. 4
C. 0.4
D. Rs.4 billion
9 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
10 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
A. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right

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