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Economics Mcqs 4423 MCQs [All-Courses]

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.

If the investment demand curve is vertical ?

A both monetary and fiscal policy are ineffective

B monetary policy is effective but fiscal policy is ineffective

C monetary policy is ineffective but fiscal policy is effective

D both monetary and fiscal policy are effective

Review Detailed Answer

Correct Answer: monetary policy is ineffective but fiscal policy is effective

An example of an expansionary monetary policy is ?

A a reduction in the taxes banks pay on their profits.

B an increase in the required reserve ratio

C an increase in the discount rate

D the Central bank buying government securities in the open market

Review Detailed Answer

Correct Answer: the Central bank buying government securities in the open market

The interest rate is determined in ?

A the money and labor markets

B the goods and labor markets

C the goods market

D the money markets

Review Detailed Answer

Correct Answer: the money markets

The equilibrium level of aggregate output is determined in ?

A the goods and labor markets.

B the goods market

C the money markets

D the money and labor market

Review Detailed Answer

Correct Answer: the goods market

The demand for money represents the idea that there is ?

A a positive relationship between the interest rate and the quantity of money demanded

B a negative relationship between the price level and the quantity of money demanded

C a negative relationship between the level of aggregate output and the quantity of money demanded

D a negative relationship between the interest rate and the quantity of money demanded

Review Detailed Answer

Correct Answer: a negative relationship between the interest rate and the quantity of money demanded

The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

A Transactions motive

B precautionary motive

C profit motive

D speculation motive

Review Detailed Answer

Correct Answer: speculation motive

Which of the following events will lead to a decrease in the equilibrium interest rate ?

A A sale of government securities by the central bank

B An increase in the level of aggregate output

C An increase in the discount rate

D A decrease in the price level

Review Detailed Answer

Correct Answer: A decrease in the price level

When economies speak of the demand for money which of the following are they asking ?

A How much cash do you wish you could have?

B How much wealth would you like?

C How much income would you like to earn?

D What proportion of your financial assets do you want to hold in non-interest-bearing forms

Review Detailed Answer

Correct Answer: What proportion of your financial assets do you want to hold in non-interest-bearing forms

Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?

A increase the money supply because it is now cheaper for banks to borrow from the central bank

B decrease the money supply because it will now be more expensive for business firms and consumers to borrow money

C Not change the money supply because banks already have excess reserves they cannot lend

D Decrease the money supply because it is now cheaper for banks to borrow from the central bank instead instead of buying government securities

Review Detailed Answer

Correct Answer: Not change the money supply because banks already have excess reserves they cannot lend

As the required reserve ratio is decreased the money multiplier ?

A decreases

B remain the same, as long as banks hold no excess reserves

C could either increase or decrease

D increases

Review Detailed Answer

Correct Answer: increases

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

If the investment demand curve is vertical ?

An example of an expansionary monetary policy is ?

The interest rate is determined in ?

The equilibrium level of aggregate output is determined in ?

The demand for money represents the idea that there is ?

The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

Which of the following events will lead to a decrease in the equilibrium interest rate ?

When economies speak of the demand for money which of the following are they asking ?

Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?

As the required reserve ratio is decreased the money multiplier ?