PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Which of the following causes M1 demand to decrease.	A. A fall in the tax rate B. An increase in income C. A fall in the interest rate D. An increase in the use of credit cards
2	Large difference is inflation rates among countries are almost always the result of large difference in.	A. Productivity B. Real income growth C. The growth rates of real money demand D. The growth rates of nominal money supplies
3	"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.	A. Weaken fiscal policy B. Avoid monetary policy errors C. Strengthen the impact of monetary policy D. Ensure the independence of the central bank
4	If the Federal reserve conducts open market __ the money supply __ shifting LM curve to the left.	A. Purchases ; decreases B. sales ; decreases C. purchases ; increases D. sales ; increases
5	Under system fixed exchange rates which of the following policies promotes internal balance for a nation.	A. Fiscal policy B. Monetary policy C. Both fiscal policy and monetary policy D. Neither fiscal policy nor monetary policy
6	During periods of negative demand shocks deficit target reductions such as those mandated in the Gramm Rudman Hollings Act would tend to.	A. Stimulate the economy and increase empolyment. B. Result in additional recessionary declines in employment and income C. Stimulator defiance spending D. Have an automatic stabilizing impact upon the economy
7	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. rise ; LM ;right B. rise ; IS ; right C. Fall ; LM ; left D. rise ;IS; Left
8	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
9	The main role of the Federal Reserve is to	A. Administer the government on the state of the economy B. Overses the operations of the financial system and monetary management. C. Establish the value of the dollar and official interest rates D. Provide advice to the government on the state of the economy.
10	Per Capita income is obtained by dividing National income by	A. Total labor Force in the country B. Unemployed Youth in the country C. Total population of that country D. None

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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

An autonomous increase in money demand.

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

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.

The Central Bank controls money and credit with the exception of.

Which of the following persons would be considered unemployed.

How do the banks gain from this corporate behavior.

Intermediate goods are meant for

A shift in tastes loward foreign goods______ net exports and causes the quantity of aggregate output demanded to.

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

If the original money supply is MSo and the original demand for money is MDo then

Weighted monetary aggregates

The purpose of fiscal policy is to

The parable of Riding a Switchback suggests that stabilizing policy.

a contractionary monetary policy

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

By controlling the monetary base economists mean

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

Employment tends to _______ whwn aggregate output.

The intersection of the IS and LM curves captures.

If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.

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

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Set 10

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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

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When the central Bank ____ the money supply the LM curve shifts to the _ interest rates __________ and equilibrium aggregate output.