PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the	A. right ; left B. right ; right C. left ; left D. left ; right
2	Automatic stabilizers	A. Counter balance fluctuations in economic activity. B. Reinforce fluctuations in economic activity C. Do not occur when the economy falls into recession D. Reduces the size of the deflationary gap
3	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
4	There are ______ methods of measuring GDP	A. Three B. Four C. Five D. None
5	As the interest sensitivity of investment spending increase.	A. Monetary policy has a larger effect on output B. Fiscal policy has a larger effect on output C. The multiplier increases D. All of the above
6	A decrease iin money demand other thing equal shifts the _____ curve to the	A. IS ; right B. Is ; Left C. LM ; Left D. LM ; Rfight
7	Under a fixed exchange rate system an expansionary fiscal policy leads to a	A. Trade account deficit and a capital account surplus. B. Trade account deficit and a capital account deficit C. Trade account surplus and a capital account surplus D. Trade account surplus and a capital accoundt deficit
8	Believers in the monetarist rule assert that	A. Lags are long and variable B. the economy cna be stabilized by automatic mechanisms C. The central bank should keep the money supply growth constant D. All of the above
9	The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.	A. Crowding out B. Recognition lag C. Public sector borrowing requirement D. Fiscal drag
10	Increasing the government budget deficit.	A. Increases output in the long run B. Decreases output in the short run C. Decreases output in the long run. D. Decreases the interest rate in the medium run.

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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

Monetary policy is concerned with influencing.

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

A Political problem with discretionary fiscal policy is the.

A monetary expansion is characterized by

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 __________

In the Keynesian cross diagram a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to ______

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

Fiscal policy refers to.

As the required reserve ratio is decreased the money multiplier.

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

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 _______

"Transactions" money is money used as a

The intersection of the IS and LM curves captures.

Why would corporations want to achieve zero balances in their checking accounts.

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

When there is no change in central banking holding of international reserve balances a country's

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

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

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

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Top Scorers Of PPSC Economics Topic 4 Monetary & Fiscal Policy MCQ`s Test

PPSC Economics Chapter 4 Important MCQ's

Test Questions

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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 ________

In the Keynesian cross diagram a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift and the equilibrium level of aggregate output to

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

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 _

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the __ to shift

At any given level of the interest rate expectations are likely to be_ optimistic and planned investment is likely to be when _ is growing rapidly than when it is growing slowly or falling.