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

A state of government bonds by the central bank should cause

Question # 3

an asset that can easily be exchanged for goods and services is called a.

Question # 4

Money is

Question # 5

A 15% VAT is a.

Question # 6

An increase in expected inflation is likely ot cause.

Question # 7

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 # 8

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

Question # 9

An increase in the money supply other thighs equal shifts the ______ curve to the

Question # 10

Suppose you are a monetarist and believe in the the monetarist rule which the monetary authorities appear to be following if the economy beings to experience a slight increase in the inflation rte you would recommend that the monetary autorities.

Question # 11

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

Question # 12

When a government prints money to finance its expenditures it is likely to cause

Question # 13

Factors that cause the IS curve to shift include.

Question # 14

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.

Question # 15

An autonomous increase in the value of the domestic exchange rate.

Question # 16

The opportunity cost of holding currency decreases when.

Question # 17

"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 # 18

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

Question # 19

The near term effect of an unexpected sale of bonds by the central bank is.

Question # 20

An autonomous increase in money demand.

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PPSC Economics Chapter 4 Important MCQ's

Sr.# Question Answer
1 An increase in oil prices, such as the oil shocks in the 70 s, lead to _______ there by causing _____
A. A movement along the AS curve cost push inflation
B. A leftward shift int he AS curve demand pull inflation.
C. A right ward shift in the AS Curve cost push inflation
D. a left ward shift in the AS curve cost push inflation
2 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
A. LM ; rightward
B. IS ; rightwards
C. LM ; Leftward
D. IS ; Leftward
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 The parable of Riding a Switchback suggests that stabilizing policy.
A. Is not sufficiently stimulating or contra citing the economy at any time
B. Is desirable
C. Is effective
D. Is stimulating or contracting the economy at the wrong times.
5 If Federal reserve conducts open market sales, the money supply ___ shifting the LM curve to the_____
A. decreases ; right
B. decreases ; left
C. Increases ; right
D. Increase ; left
6 A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate
A. right ; fall
B. right ; rises
C. left ; falls
D. left ; rises
7 A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.
A. Increases ; increases ; right
B. Increases ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; right
8 There are ______ methods of measuring GDP
A. Three
B. Four
C. Five
D. None
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 The money multiple tells us teh ultimate increase in.
A. The income level due to an increase in the money base
B. The money supply due to an increase in the money base.
C. The money supply due to an increase in the income level
D. The income level due to an increase in the money supply

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