Government of Pakistan issues currency on the basis of _____.

1. 1. Tax collection
   2. Availability of gold in the country
   3. Availability of dollars in the country
   4. Demand for money in the country

Economic development is measured on the basis of _____.

1. 1. increase in real GNP
   2. increase in nominal GNP
   3. increase in personal incomes
   4. increase in government revenue

According to Keynes, demand for money is affected by _____.

1. 1. Income
   2. Rate of interest
   3. Literacy rate
   4. (a) and (b) above

If quantity of money is doubled, then according to Quantity Theory, value of money is _____.

1. 1. Half
   2. Double
   3. Remains constant
   4. None of these

Which is the most widely used tool of monetary policy?

1. 1. Clearing house
   2. Discount rate
   3. Issuing of notes
   4. Open-market operations

When a central bank wants to increase money supply in circulation, it _____.

1. 1. purchase govt. securities
   2. lowers bank rate
   3. directs banks to advance more loans
   4. (a) and (b) above

Every country establishes central bank to _____.

1. 1. issue notes
   2. supervise commercial banks
   3. give loans to businessmen
   4. (a) and (b) above

Central bank’s rate of lending to commercial banks is called _____.

1. 1. Discount rate
   2. Interest rate
   3. Money rate
   4. Control rate

Which people are most likely to gain during inflation?

1. 1. Those living on pension
   2. Those who are repaying borrowed money
   3. Those living on their savings
   4. Those who have lent money

Which of the following is a withdrawal from the circular flow income stream?

1. 1. Subsidies
   2. Investment
   3. Taxation
   4. Consumption