PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Disposable income is obtained by subtracting ________ taxes from personal income	A. Indirect taxes B. Direct taxes C. Subsidies D. None
2	As a result of the increase in government expenditures disposable income increases by.	A. Rs.10 billion B. Rs.9 billion C. Rs.20 billion D. Rs.5 billion
3	An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.	A. Revenue from value added tax B. Level of company profits C. Level of unemployment D. Average level of wages
4	If the central Bank wished to Tighten money is would.	A. Lower the discount rate B. Sell government securities C. Lower the legal reserve ratio D. Lower the tax rate
5	There are _______ major instrument of monetary policy.	A. Three B. Four C. Five D. None
6	A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.	A. fall ; leftward B. rise ; leftward C. fall ; rightward D. rise ; rightward
7	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	A. The IS curve shifts left ward B. The IS curve shifts right ward C. The money supply increase D. Taxes are cut
8	The quantity of money demanded varies.	A. Directly with both prices and output B. Inversely with both prices and output C. Directly with prices and inversely with output D. Inversely with prices and directly with output
9	"Money deposited for a term is not left in bank vaults but is loaned out by the banks This means that is dollar on deposit can flow back into the banking system one or more times and that dollar can expand the money supply What cnterminlogy do economists use to refer to the proses described in this clip.	A. The multiplier B. The money multiplier C. Required reserve ratio D. Open market operations
10	Fiscal policy refers to.	A. The actions of the central bank in controlling the money supply B. The government's altitude to taxation C. The spending and taxing policies used by the government to influence the economy D. The governments regulation of financial intermediaries.

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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

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

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

The quantity theory of money allows monetarists to obtain a number of economics predictions by assuming a constant.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the _______ curve to the __________

" 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.

The largest source of tax revenue for the federal government is.

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

A Political problem with discretionary fiscal policy is the.

If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.

The IS curve shifts to the left when

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.

Consider the five panels of the figure on the previous page in which of the five would monetary policy be the weakest.

The purpose of financial intermediaries is.

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

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 decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

Which of the following would qualify as an aggregate supply shock.

An item designed as money that is intrinsically worthless could the.

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

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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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At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to ______ at any given interest rate and shifts the _ curve to the ________

If the Federal reserve conducts open market the money supply shifting LM curve to the left.

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.