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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

Which of the following is included in broad money, but not included in narrow money ?
A savings accounts
B Travelers checks
C Currency held outside banks
D Automatic-transfer savings accounts
Correct Answer: savings accounts
An item designated as money that is intrinsically worthless is ?
A precious metals
B commodity money
C fiat money
D barter items
Correct Answer: fiat money
Government Securities with terms of more than one year are called ?
A bills of exchanges
B government bonds
C Treasury bills
D Capital bills
Correct Answer: government bonds
The three main tools of monetary policy are ?
A fiat, commodity and deposit money
B Open-market operations reserve requirements and the refinancing rate
C The money supply, government purchases and taxation
D Government expenditures taxation and reserve requirements
Correct Answer: Open-market operations reserve requirements and the refinancing rate
Suppose the State Bank purchases a Rs 1,000 government bond from you. If you deposit the entire Rs 1,000 in you bank what is the total potential change in the money supply as a result of the State Bank’s action if the your bank’s reserve ratio is 20 percent ?
A Rs 4,000
B Rs 5,000
C Rs 1,000
D Rs 0
Correct Answer: Rs 5,000
Which of the following policy actions by a central bank is likely to increase the money supply ?
A Increasing the refinancing rate
B All of these will increase the money supply
C Buying government bonds in open market operations
D Increasing reserve requirements
Correct Answer: Buying government bonds in open market operations
Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?
A Rs 10,00
B Rs 1,000
C Rs 9,000
D Rs 0
Correct Answer: Rs 0
Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ?
A Money supply will increase because Banca Solida will increase its loans
B The effect on money supply cannot be determined from the information given
C Money supply will decrease because the loans will have to be repaid
D Money supply will be unchanged because the central bank has made no policy changes
Correct Answer: Money supply will increase because Banca Solida will increase its loans
Commodity money ?
A has no intrinsic value
B has intrinsic value
C is used exclusively in the economies of western Europe and north America
D is used as reserves to back fiat money
Correct Answer: has intrinsic value
Which of the following is not a function of money ?
A hedge against inflation
B Medium of exchange
C unit of account
D Store of value
Correct Answer: hedge against inflation
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