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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 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
A fall in investment demand can result from ?
A higher interest rates
B lower expected future profits
C more expensive capital goods
D All of the above
Correct Answer: All of the above
One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?
A rise; increase, increase
B rise, falls, increase
C rise, increase, falls
D rise, falls, falls
Correct Answer: rise, falls, falls
Equilibrium in the Money market will change if there is ?
A a change in the real money supply
B a change in real income
C a change in competition in the banking industry
D any of the above
Correct Answer: any of the above
The monetary base is ________ and _________?
A bank deposits, building society deposits
B Currency in circulation, banks cash reserves
C retail sight deposits building society deposits
D retail deposits, wholesale deposits
Correct Answer: Currency in circulation, banks cash reserves
When real income increases other things equal we can expect the demand for real money holdings to ?
A fall
B not change
C increase
D None of these
Correct Answer: increase
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