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

A state of government bonds by the central bank should cause

Question # 2

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 3

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

Question # 4

Commercial banks

Question # 5

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

Question # 6

"Far better for central bankers to get out of the fine tuning business instead they should d try to keep.

Question # 7

Which of the following would qualify as an aggregate demand shocks.

Question # 8

Which of the followig does not shift the IS curve .

Question # 9

A decrease in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the

Question # 10

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

Question # 11

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 __________

Question # 12

If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____

Question # 13

The purpose of financial intermediaries is.

Question # 14

If the Bank of Pakistan wished to pursue an expansionary monetary policy it would.

Question # 15

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

Question # 16

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

Question # 17

The quantity of money demanded varies

Question # 18

An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to.

Question # 19

" 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.

Question # 20

What technical terminology do economists use to refer to how much the money will multiply as this process unfolds.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 The investment demand curve shows the relationship between the levels of.
A. Investment and consumption
B. Consumption and Interest rate
C. Investment and interest rate
D. None
2 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
3 The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.
A. To eliminate seignior age
B. To allow open market operations
C. To enhance the credibility of monetary policy.
D. None of the above
4 The Central Bank controls money and credit with the exception of.
A. Controlling the money base through open market operations
B. Controlling reserve requirements
C. Setting the discount rate of interest
D. controlling the stock market
5 "A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.
A. Upward
B. Down ward
C. To be zero
D. To match inflation
6 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
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 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
9 When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.
A. 0.25
B. 4
C. 0.4
D. Rs.4 billion
10 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.
A. Increase the money growth rate slightly
B. Decrease the money growth rate slightly
C. Leave the money supply growth unchanged
D. Enact a one time slight decrease in the money supply

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