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

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

Question # 2

If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.

Question # 3

If the State bank of Pakistan wished to pursue a light monetary policy it would.

Question # 4

The ratio of debt to GDP will be larger

Question # 5

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 rise and the IS curve to shift to the

Question # 6

Automatic stabilizers

Question # 7

A sale of bonds by the central bank should cause.

Question # 8

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

Question # 9

Fiscal policy is purposeful movements in _____designed to direct an economy

Question # 10

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

Question # 11

The intersection of the IS and LM curves captures.

Question # 12

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 _____the equilibrium level of aggregate output to fall and the IS curve to shift to the.

Question # 13

A good that is used as a medium of exchange as well as being a consumption good is called.

Question # 14

"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.

Question # 15

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

Question # 16

The parable of Riding a Switchback suggests that stabilizing policy.

Question # 17

What's the most common way for a central bank to reduce the money supply.

Question # 18

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 ______

Question # 19

A monetary expansion is characterized by

Question # 20

The situation in which the imports are greater than exports is termed as.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 In the Keynesian cross diagram, an expenditure causes the aggregate demand function to shift _________ and the equilibrium level of aggregate output to.
A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
2 Money or paper currency serves at least _______ functions.
A. Three
B. Four
C. Five
D. Seven
3 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
4 using money as a medium of exchange.
A. Requires people to math goods wanted with goods available.
B. Reduces the range of feasible exchanges in the economy
C. Inhibits economic transactions
D. Reduces the need for barter in the economy.
5 The IS curve shifts to the left when
A. Taxes increase
B. Government spending increase
C. The money supply increases
D. All of the above occur
6 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
7 According to Marshall the basis of consumer surplus is.
A. Law of diminishing marginal utility.
B. Law of equal marginal utility
C. Law of proportions
D. All of the above
8 If the nominal money supply doubles while real money demand is unchanged what happens to the price level.
A. The price level increases by a factor of four
B. The price level doubles
C. The price level is unchanged
D. The price level falls by one half.
9 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.
10 The limit of an economy's total productive capacity at any given time is set by
A. The amount of money in circulation
B. Business demand for goods and services
C. The level of government spending and taxation
D. the quantity and quality of its productive resources

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