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

The IMF is an agency charged with providing.

Question # 2

The ratio of debt to GDP will be larger

Question # 3

A Political problem with discretionary fiscal policy is the.

Question # 4

A monetary expansion is characterized by

Question # 5

An increase in government spending causes the equilibrium level of aggregate output to_______ at any given interest rate and shifts the ____ curve to the

Question # 6

A decline in the money supply shifts the LM curve to the left causing the interest rate to ________ and output to___

Question # 7

The function of money do not include.

Question # 8

The budget deficit tends to decrease when

Question # 9

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

Question # 10

The limit of an economy's total productive capacity at any given time is set by

Question # 11

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

Question # 12

Net taxes are.

Question # 13

According to the supply side model a reduction in the tax rate.

Question # 14

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

Question # 15

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

Question # 16

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

Question # 17

Money or paper currency serves at least _______ functions.

Question # 18

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

Question # 19

The implementation lag for monetary policy is generally

Question # 20

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.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 Fiscal policy refers to.
A. The actions of the central bank in controlling the money supply
B. The government's altitude to taxation
C. The spending and taxing policies used by the government to influence the economy
D. The governments regulation of financial intermediaries.
2 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
3 In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
4 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
5 When your grandmother keeps her savings hidden under her mattress she is using money as.
A. a standard of deferred panyment
B. A comfortable thing for sleeping
C. A medium of exchange
D. A store of value
6 One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.
A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
7 In economics money refers to
A. Income
B. Wealth
C. Assets use and accepted an payment
D. Currency
8 What's the most common way for a central bank to reduce the money supply.
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bounds from the government
D. Buy bonds from the public
9 According to classical models, the level of employment is determined primarily by
A. The level of aggregate demand for goods and services
B. Prices and wages
C. Government taxation
D. Government spending
10 As the required reserve ratio is decreased the money multiplier.
A. Could either increase or decrease
B. Remains the same as long as banks hold no excess reserves
C. Increase
D. Decreases

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