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

Believers in the monetarist rule assert that

Question # 2

The government performs its redistribution function mainly through.

Question # 3

A change in the money supply has a greater effect upon equilibrium income.

Question # 4

Which of the following persons would be considered unemployed.

Question # 5

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

Question # 6

A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.

Question # 7

The IMF is an agency charged with providing.

Question # 8

The main source of interest profits for banks is.

Question # 9

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

Question # 10

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

Question # 11

Factors that cause the IS curve to shift include.

Question # 12

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

Question # 13

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

Question # 14

using money as a medium of exchange.

Question # 15

Which of the following measures is the best measure of money as a medium of exchange.

Question # 16

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

Question # 17

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

Question # 18

in The Liquidity trap region

Question # 19

The quantity of money demanded varies.

Question # 20

Tax incidence is the

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.
A. The multiplier
B. The money multiplier
C. Required reserve ratio
D. Open market operations
2 The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.
A. Bank's line of credit
B. Reserve ratio
C. Current ratio
D. Money multipiler
3 The function of money do not include.
A. an exchange of purchasing power
B. A unit of account
C. A medium of exchange
D. A store of value
4 Which of the following would qualify as an aggregate supply shock.
A. An unexpected increase in oil prices
B. Seasonally expected increase in oil prices
C. An unexpected reduction in consumer confidence
D. an anticipated tax cut
5 A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate
A. Rises ; rises
B. rises ; falls
C. falls ; rises
D. falls ; falls
6 A monetary action consistent with the central bank selling bonds in the open market would be.
A. An increase in the reserve ratio
B. A reduction in the discount rate of interest
C. An increase in government spending.
D. a reduction in excise taxes
7 A decrease in the legal reserve ratio from 25% to 20% will
A. Result in light money
B. Be contractionary
C. Increases excess reserves and the potential money multiplier
D. Decrease excess reserves and the potential money multiplier
8 "Transactions" money is money used as a
A. Store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
9 A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______
A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; right
10 The opportunity cost of holding currency decrease when
A. Income decreases
B. The interest rate on bonds decreases
C. The interest rate on money decrease wealth decrease
D. Wealth decreases

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