Senior Subject Specialist Economics Past Paper MCQs of PPSC

In a depression economy along a horizontal aggregate supply curve

A) Wages and prices are continuously falling

B) Wages and prices are “Sticky” downwards

C) Real GDP cannot be increased or decreased

D) Unemployment is relatively low

The simple Keynesian aggregate supply curve Is:

A) Upward-sloping as real GDP Increases

B) Horizontal at GDP levels below full Employment

C) Based on the concept that all unemployment is voluntary

D) Downward-sloping as real GDP increases.

In the simple quantity theory model the value of money is determined by

A) Velocity

B) Employment

C) what money will buy

D) The quantity of inputs

In the aggregate supply curve is horizontal it means that

A) Firms cannot increase output

B) Firm are unwilling to increase output

C) Firms will increase output only if prices rise

D) Firms will increase output at the current price

The equation of Exchange is written

A) MO

B) MP=OV

C) MV=PQ

D) MQ=GDP

Hyper-inflation have one cause

A) Excess demand for wage increases by workers

B) Defence spending

C) Excess monetary growth

D) Wage and price control

E) None of these

Hyperinflation commonly occurs when there is a significant rise in money supply. When interest rates fall or taxes decrease and the access to money becomes less restricted, consumers become less sensitive to price changes that is not supported by economic growth.

So the Answer is None of these