PPSC Economics Topic 4 Monetary & Fiscal Policy

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PPSC Economics Chapter 4 Important MCQ's

Sr.#	Question	Answer
1	Factor that cause the IS curve to shift include.	A. Change in autocoups consumer spending B. Change in taxes C. Change in government spending D. All of the above
2	A monetary action consistent with the central bank selling bonds in the open market would be.	A. An increase in the reserve ratio B. A reduction in the discount rate of interest C. An increase in government spending. D. a reduction in excise taxes
3	Which of the following causes M1 demand to 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
4	When there is no change in central banking holding of international reserve balances a country's	A. Trae balance always equals 0 B. Current account balance always equals 0 C. Capital account balance always equals 0 D. Balance of payments always equal 0
5	A decrease 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
6	A decrease in the legal reserve ratio from 25% to 20% will	A. Result in light money B. Be contractionary C. Increases excess reserves and the potential money multiplier D. Decrease excess reserves and the potential money multiplier
7	The quantity of money demanded varies	A. Directly with both prices and output B. Inversely with both prices and output C. Directly with prices and inversely with output D. Inversely with prices and directly with output
8	A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.	A. Increase; increases ; right B. Increase ; decreases ; left C. decreases ; increases ; left D. decreases ; decreases ; left
9	An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the	A. Net exports LM right B. Net exports LM left C. Money demand IS right D. Money demand LM left
10	"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.	A. Weaken fiscal policy B. Avoid monetary policy errors C. Strengthen the impact of monetary policy D. Ensure the independence of the central bank

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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

using money as a medium of exchange.

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

A decrease in the legal reserve ratio from 25% to 20% will

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

Why do people keep currency in their pockets when bank deposits pay interest.

A decrease iin money demand other thing equal 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 _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

The quantity of money demanded varies.

Monetary policy can affect output.

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

An example of nondiscretionary fiscal policy would be.

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

"Rising productivity does not in itself spell the end of inflation. With enough______ it would still be possible to whip prices into a froth the blank is best filled with.

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 a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.

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

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 _______

A decline in the money__________ shifts the LM curve to the ____ causing the interest rate to rise and output to fall.

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

Prepare Complete Set Wise PPSC Economics Topic 4 Monetary & Fiscal Policy MCQs Online With Answers

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Set 12

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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 reduction in government spending causes the equilibrium level of aggregate output to ___ at any given interest rate and shifts the curve to the.

Keynes suggested that ____ income households consume a proportion of their income than income households.

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 __l and the IS curve Curve to shift to the.

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 _

A decline in the money______ shifts the LM curve to the causing the interest rate to rise and output to fall.

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _ relative to foreign goods and results in a in net exports.