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

Try The 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

The investment demand curve shows the relationship between the levels of.

Question # 2

An example of nondiscretionary fiscal policy would be.

Question # 3

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

Question # 4

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.

Question # 5

Which of the followig does not shift the IS curve .

Question # 6

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Question # 7

There are _______ major instrument of monetary policy.

Question # 8

A decrease in the legal reserve ratio from 25% to 20% will

Question # 9

An increase in money demand other thing equal shifts the ____ curve to the___

Question # 10

When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

Question # 11

Which of the following events will lead to a decrease in the demand for money.

Question # 12

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 13

Net taxes are.

Question # 14

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 # 15

If firms paying employees monthly began paying them weakly then the demand for money would.

Question # 16

The equilibrium level of income is.

Question # 17

Suppose a new law imposes a tax on all trades of bonds and stock What is the likely effect on money demand.

Question # 18

To move from point E to point E1 is consistent with.

Question # 19

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

Question # 20

Money and income are.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The largest source of tax revenue for the federal government is.
A. The personal income tax
B. The social security tax
C. The property tax
D. The sales tax
2 Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.
A. New classical economists
B. Monetarists
C. Marxists
D. Keynesians
3 In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.
A. IS ;right
B. IS ;Left
C. LM ; Left
D. LM ; Right
4 An increase in expected inflation is likely ot cause.
A. A decline in the demand for real balances
B. an increase in the demand for real balances.
C. No change i the demand for real balances
D. No change in the demand for real balances only of the income elasticity of real money demand is zero.
5 Factor that cause the IS curve to shift include.
A. Change in autocoups consumer spending
B. Change in taxes
C. Change in government spending
D. All of the above
6 A major advantage of monetary over fiscal policy is that monetary policty.
A. Can be put into effect more quickly
B. Affects all sectors of the economy equally
C. Authorities are quicker to see the need for policy
D. Has a more direct and predictable impact on spending.
7 In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift _____ the equilibrium level of aggregate output to fall, and the IS curve to shift to the.
A. up ; left
B. up ; right
C. down ; left
D. down ; right
8 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
9 You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.
A. If you live in a 1st best world.
B. If you live in a 2nd best world
C. If the tax rates on some of the items are prohibitively high
D. Either of the above
10 "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

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