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

Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes.

Question # 2

The implementation lag for monetary policy is generally

Question # 3

You move some of your savings account balance into your checking account.

Question # 4

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

Question # 5

In the Keynesian corss diagram, and cline 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.

Question # 6

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

Question # 7

How much of the Rs.5 billion dollar increase in government expenditures will be recouped in taxes.

Question # 8

Believers in the monetarist rule assert that

Question # 9

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

Question # 10

a contractionary monetary policy

Question # 11

The central bank and the government are working against each other if as the government cuts taxes the central bank

Question # 12

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Question # 13

Money and income are.

Question # 14

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.

Question # 15

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

Question # 16

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Question # 17

Those who favor setting the target rate of inflation at about 3% believe.

Question # 18

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.

Question # 19

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.

Question # 20

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

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 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.
A. rise ; rise
B. rise; fall
C. fall ; rise
D. fall ; fall
2 If the central bank prints more 10 billion and spends them then as a direct result of this action.
A. M1 and M2 both increases
B. Neighed M1 nor M2 increase
C. M1 increase but M2 does not
D. M2 increased but M1 does not.
3 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
4 "Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.
A. Income growth
B. Unemployment
C. Money growth
D. Taxes
5 An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports
A. Less ; decreases
B. Less ; increases
C. More ; decreases
D. more ; increases
6 " 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.
A. The government may tax less
B. The debt may become excessive
C. The government may spend more
D. The money supply may increase excessively
7 If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.
A. Increase the minimum reserve asset ratio
B. Sell government securities on the open market
C. Buy government securities on the open market
D. Raise interest rates.
8 In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.
A. increases ; increase
B. increases ; decrease
C. decreases ; decreases
D. decreases ; increses
9 A decline in taxes __ consumer expenditure and shifts the _ curve shifts to the.
A. Raises ; LM; Right
B. Lowers; IS ; left
C. raises ; IS; right
D. Lower ; LM; left
10 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

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