PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 The multiplier which specifically refers to an equal increase in government spending and taxes, giving rise to that same equal increase in national income is called. the Keynesian multiplier The balanced budget multiplier the deficit multiplier None of the above
2 When the price level increases 25% starting from a price level equal to 100, a Rs. 1000 bond will have a real value of . Rs. 800 Rs.1250 Rs.750 Rs.666
3 From a Keynesian perspective business investment will de cline as a result of. A fall in the interest rate A decrease in business taxes A decline in business expectations Acceleration of business depreciation
4 When an increase in government spending is matched by an equal decrease in government transfers, the income level will. Stay the same Increase Decrease All of the above
5 The sign of the simple correlation coefficient is determined by The intercept of the least squares equation. The slope of the least squares equation The appropriate economic theory. The researcher
6 A variable whose value is determined witching an economic theory or model is. Exogenous Independent Deterministic Endogenous
7 When a British pound equals Rs. 1.60 and the French France equals Rs. 0.40 the ability to earn infinite profit if it were not the case, implies that the exchange rate would be. 1 franc = 4 pounds 1 franc = 1 pound 5 franc = 1 pound None of the above
8 During inflation. Lenders lose borrowers gain. Borrowers lose , lenders gain The real interest rate rises Borrowers and lenders both lose.
9 If equilibrium national income is less than the full employment the gap can be closed by. Raising taxes Decreasing government expenditures Raising taxes and decreasing government expenditures. Increasing government expenditures.
10 Over a two year period your income has increased 10% At the same time the consumer price index has increased 205 Your real purchasing power is. 92% of the original value 50% of its original value Not affected by the price change 109% of its original value
11 An asset with zero carrying costs and a present value of Rs.50,000 will return continuous annual yield of Rs.5000 if the current and future rate of inters is. 5% 8% 10% 3%
12 The risk free rate of interest would not be affected by. Changes in real output Change in the money supply Term to maturity None of the above
13 Keynes and Say's macroeconomic theory of employment were diametrically opposed Say state that. Supply creates demand Demand creates supply Unemployment is a most likely state of affairs Full employment can only be achieved by government interference.
14 In a simple Keynesian world assume the economy is opiating at a full employment noninflationary level worsening world conditions necessitate additional government spending of Rs.50 billion. What should be the direction of change in taxes and magnitude of change to maintain stable price and full employment equilibrium. Increase by Rs.50 billion Increase by more than Rs. 50 billion Increase by less than Rs.50 billion. Decrease by more than Rs.50 billion.
15 Appreciation of the U.S. dollar results in. U.S. tourists traveling abroad being worse off U.S. imports increasing. Foreign currency buying more U.S. goods and services. No change iin foreign pucchases or sales.
16 Under law of demand. Price of commodity is an independent variable Quantity demanded is a dependent variable Reciprocal relationship is found between price and quantity demandded All of the above
17 Which of the following is an economic activity. Teaching of a teacher in the school. To teach son at home To serve her child by mother to play foot ball by a student
18 If the Nominal GNP of an economy rose from Rs. 5000 to 5500 between 1985 and 1986 while the price index rose from 100 to 110 during the same period real GNP Fell by 10% from 1985 to 1986 Rose by 10% from 1985 to 1986 Remained constant from 1985 to 1986 Fell by 1% from 1985 to 1986
19 In which of the following situations will an increase in the money supply have no effect upon equilibrium income. LM is steeply sloped and IS is relatively flat LM is vertical and IS si steeply sloped LM is steeply sloped and IS is vertical LM is relatively flat as is IS
20 Given the IS equation Y = Ke a - Ke Bn the IS slope decreases when Ke increase and b increases Ke decreases and b increases Ke increases and b decreases Ke decreas4es and b decreases
21 A Rs.10 increase in autonomous investment spending shifts is. Rightward by Rs. 10 Leftwards by Rs. 10 Rightward by Ke (Rs.10) Leftward y Ke (Rs.10)
22 An increase in the marginal propensity to import. Has the some effect upon the multipliers as an increase in the MPC Has no effect upon the multipliers Increases the value of the multipliers Decreases the value of the multipllers
23 Given a proportional income tax and a government budget that is currently in balance, an increase in autonomous investment , caters parabasal increases equilibrium income and the budget. Romaic's in balnce Has a surplus Has a deficit None of these
24 When an increase in government spending is matched by an equal decrease in government transfers the income level will. Stay the same Increase Decrease None of these
25 Where there is an equal increase in net tax revenue and government spending, ceteris paribus. (C+I+G) is shifting upward (C+I+G) is shifting downward (C+I+G) does not shift All of these
26 What is the possible cause for a falling real GNP over a period of time. A general fall in the value of output though changes in quantities producted. A general increase in prices An increase in the value of output produced and a general increase in prices A, B and C
27 Which one of the following would cause demand pull inflation. Increases iin production costs Wage gains in proportion productivity gains An increase in aggregate demand with shortages of sup ply Monoposonistic labor markets
28 Which of the following represents monetary policy geared to increases the supply of money. The purchase of bonds by the Federal Reserve Bank The sale of bonds by the Central Bank An increase in reserve requirement A decrease in taxes
29 Find the revenue the government collects as a result of the tax Rs.10 million Rs.40 million Rs.16 million Rs.30 million
30 Find the change in revenue to the industry due to the taxs. Rs. 40 billion Rs. 34 million Rs.25 million Rs.36 Million.
Download This Set

Is this page helpful?