PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to.	A. increases ; increase B. increases ; decrease C. decreases ; decreases D. decreases ; increses
2	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
3	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 __________	A. rise ; LM ;right B. rise ; IS ; right C. Fall ; LM ; left D. rise ;IS; Left
4	What happens to the money supply if the deficit is financed by selling bonds to the central bank.	A. The money supply increases B. The money supply decreases C. The money supply is unaffected D. We cannot tell what will happen to the money supply
5	Which of the following causes M1 demand is decrease.	A. A fall in the tax rate B. An increase in income C. A fall in the interest rate D. An increase in the use of credit cards
6	In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.	A. up ; left B. up ; right C. down ; left D. down ; right
7	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
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	A major advantage of monetary over fiscal policy is that monetary policy	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.
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.	A. 0.25 B. 4 C. 0.4 D. Rs.4 billion

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MCQ's Test For PPSC Economics Topic 4 Monetary & Fiscal Policy

PPSC Economics Topic 4 Monetary & Fiscal Policy

In the Keynesian cross diagram a decline in autonomous consumer expenditure causes the aggregate demand function to shift down The equilibrium level of aggregate output to ___________ and the IS curve to shift to the

The opportunity cost of holding currency decrease when

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

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

Weighted monetary aggregates

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

Total utility of a commodity is measured by which price of that commodity.

Following the work of _____________ in the 1960s, and the controversy associated with these views in the 1970s, there was a revival of interest by economists and government in monetary policy.

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

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

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

Disposable income is obtained by subtracting ________ taxes from personal income

The government performs its redistribution function mainly through.

Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization This function of money is called.

The rate of which central bank lends to commercial banks is known as

Monetary policy can affect output.

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

What happens to the money supply if the deficit is financed by selling bonds to the general public.

If young busness professionals in Pakistan suddenly decide that driving japan made cars is an important status symbol net exports will tend to _____________causing aggregate demand to.

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

PPSC Economics Chapter 4 Important MCQ's

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