PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 As the interest sensitivity of investment spending increase. Monetary policy has a larger effect on output Fiscal policy has a larger effect on output The multiplier increases All of the above
2 As the interest sensitivity of money demand increases The multiplier term increases Fiscal policy has a greater effect on output Monetary policy has a smaller effect on output All of the above
3 In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too. fiscal ; expansionary fiscal ; contractionary monetary ; expansionary monetary ; contractionary
4 Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if The IS curve shifts left ward The IS curve shifts right ward The money supply increase Taxes are cut
5 An increase in spending those results from expansionary _______ policy cause the interest rate to. fiscal ; rise fiscal ; fall incomes ; rise income ; fall
6 Aggregate output and the interest rate are ______ related to government spending and are ___ related to taxes. Positively ; positively Positively ; negatively negatively ; positively negatively ; negatively
7 In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls. monetary ; monetary monetary ; fiscal fiscal ; monetary fiscal ; fiscal
8 In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to Increase ; increase Increase ; decrease decrees ; decrease decrease ;Increase
9 In the ISLM frame work an expansionary fiscal policy causes aggregate output to _________ and the interest rate to. increases ; increase increases ; decrease decreases ; decreases decreases ; increses
10 In the money market a condition of excess supply of money cna be eliminated by a _________ in aggregate output or a __ in the interest rate , both of which increase the quantity of money demanded. rise ; rise rise ; fall fall ; rise fall ; fall
11 In the money market a condition of excess demand for money can be eliminated by a __________ in aggregate output or a ____ in the interest rate both of which reduce the quantity of money demanded. rise ; rise rise; fall fall ; rise fall ; fall
12 a contractionary monetary policy Reduces interest rtes Reduces real output shifts the LM curve to the right All of the above
13 A monetary expansion is characterized by Rising output and interest rates Rising output and falling interest rates. Constant output and falling interest rates Falling output and interest rates
14 An expansionary monetary policy Reduces interest rates Increases real output Shifts the LM curve to the right All of the above
15 In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to increase ; increase Increase ; decrease decrease ; decrease decrease ; increase
16 An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the Net exports LM right Net exports LM left Money demand IS right Money demand LM left
17 A bonds becomes a riskier asset the demand for money_______ and all else constant, the equilibrium interest rate Rises ; rises rises ; falls falls ; rises falls ; falls
18 If the demand for money increase relative to the supply of money Interest rates will trend upward Interest rates will trend downward Interest rates are not affected by increases in money demand Interest rates will behave randomly
19 An autonomous increase in money demand. Shift the IS curve to the right Shifts the IS curve to the left Shift the LM curve to the right Shift the LM curve to the left
20 An increase in money demand other thing equal shifts the ____ curve to the___ IS ; right IS ; Left LM ; Left LM ; right
21 A decrease iin money demand other thing equal shifts the _____ curve to the IS ; right Is ; Left LM ; Left LM ; Rfight
22 A decrease iin money demand other thing equal shifts the _____ curve to the IS ; right Is ; Left LM ; Left LM ; Rfight
23 A decrease iin money demand other thing equal shifts the _____ curve to the IS ; right Is ; Left LM ; Left LM ; Rfight
24 A decrease iin money demand other thing equal shifts the _____ curve to the IS ; right Is ; Left LM ; Left LM ; Rfight
25 A decrease iin money demand other thing equal shifts the _____ curve to the IS ; right Is ; Left LM ; Left LM ; Rfight
26 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____ LM ; rightward IS ; rightwards LM ; Leftward IS ; Leftward
27 During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____ LM ; Leftward LM ; rightward IS ; Leftward IS ; rightwards
28 When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output. Increase ; right ; fall; increase increases ; left ; rise ; decrease decreases ; left ;rise ; increases decreases ; left ; fall ; increases
29 An increase in the money supply shifts the LM curve to the right causing the interest rate to __________ and output to. rise ; rise rise ; fall fall ; rise fall ; fall
30 An increase in money _______ shifts the LM curve to the _____ causing the interest rate to fall and output to rise demand ; right demand ; left supply ; right supply ; left
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