PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	The intersection of the IS and LM curves captures.	A. The equilibrium of the demand and supply sides of the economy B. the equivalence of monetary and fiscal policy C. Joint equilibrium in the goods and money markets D. All of the above
2	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
3	The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.	A. To eliminate seignior age B. To allow open market operations C. To enhance the credibility of monetary policy. D. None of the above
4	Why do people keep currency in their pockets when bank deposits pay interest.	A. Because banks might steal your money B. Because currency is more liquid C. Because bank deposits lose value due to inflation D. Because bank deposits lose value due to exchange in interest rates.
5	As the required reserve ratio is decreased the money multiplier.	A. Could either increase or decrease B. Remains the same as long as banks hold no excess reserves C. Increase D. Decreases
6	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 ; Leftward B. LM ; rightward C. IS ; Leftward D. IS ; rightwards
7	Money is	A. An indicator of the scarcity of wants B. Anything that sellers accept i exchange for goods and services. C. A form of barter D. Anything that the government classifies as a trade commodity.
8	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
9	If the demand for money increase relative to the supply of money	A. Interest rates will trend upward B. Interest rates will trend downward C. Interest rates are not affected by increases in money demand D. Interest rates will behave randomly
10	Which of the following would qualify as an aggregate demand shocks.	A. An unexpected increase in oil prices B. A seasonally expected increase in oil prices C. An unexpected reduction in consumer confidence D. an anticipated tax cut

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PPSC Economics Topic 4 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

If the Central Bank wanted to decrease the quantity of money held by the public it would.

Factors that cause the IS curve to shift include.

The limit of an economy's total productive capacity at any given time is set by

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

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

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.

An increase in the money supply other thighs equal shifts the ______ curve to the

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

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 shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

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

As the interest sensitivity of investment spending increase.

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

The quantity of money demanded varies.

A major advantage of monetary over fiscal policy is that monetary policty.

An example of discretionary fiscal policy would be.

Money or paper currency serves at least _______ functions.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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Set 12

Set 13

Set 14

Topic Test

Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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When the value of the Rupee rises Pakistan goods become ___ expensive relative to foreign goods which _ exports.

A reduction in government spending causes the equilibrium level of aggregate output to ___ at any given interest rate and shifts the curve to the.