NETA ASSESSMENT
T
Test Bank t
to accompany
t
TesttBanktpreparedtbytConstant
intColonescutMacEwantUnivers
ity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
t t t t t t t t
Sixth Canadian Edition
t t
BytN.tGregorytMankiwt/tRonaldtD.tKneebonet/tKennethtJ.tMcKenzie
TesttBanktpreparedtbytConstantintColonescu,tMacEwantUniversity
NETAtcopyteditor:tFrancestRobinson
AvailabletontInstructor’stResourcetCDtISBNt.t0-17-655440-8
COPYRIGHTt©2014tbytNelsontEducationtLtd.tNelsontistatregisteredttrademarktusedthereintundertlicence.tAlltrightst
reserved.
FortmoretinformationtcontacttNelson,t1120tBirchmounttRoad,tToronto,tOntariot M1Kt5G4.tOrtyoutcantvisittourtInter
nettsitetattwww.nelson.com.
ALLtRIGHTStRESERVED.tNotparttoftthistworktcoveredtbytthetcopyrightthereontmaytbetreproducedtortusedtintanytfo
rmtortbytanytmeans—
graphic,telectronic,tortmechanical,tincludingtphotocopying,trecording,ttaping,twebtdistributiontortinformationtstorag
etandtretrievaltsystems—withouttthetwrittentpermissiontoftthetpublisher
ii
, TABLE OF CONTENTS
t t
Partt1tIntroduction
Chaptert1tTentPrinciplestoftEconomics 1-1
Chaptert2tThinkingtLiketantEconomist 2-1
Chaptert3tInterdependencetandtthetGainstfromtTrade 3-1
Partt2tSupplytAndtDemand:tHowtMarketstWork
Chaptert4tThetMarkettForcestoftSupplytandtDemand 4-1
Partt3tThetDatatoftMacroeconomics
Chaptert5tMeasuringtatNation’stIncome 5-1
Chaptert6tMeasuringtthetCosttoftLiving 6-1
Partt4tThetRealtEconomytintthetLongtRun
Chaptert7tProductiontandtGrowth 7-1
Chaptert8tSaving,tInvestment,tandtthetFinancialtSystem 8-1
Chaptert9tUnemploymenttandtItstNaturaltRate 9-1
Partt5tMoneytAndtPricestintthetLongtRun
Chaptert10tThetMonetarytSystem 10-1
Chaptert11tMoneytGrowthtandtInflation 11-1
Partt6tThetMacroeconomicstoftOpentEconomies
Chaptert12tOpen-EconomytMacroeconomics:tBasictConcepts 12-1
Chaptert13tAtMacroeconomictTheorytoftthetSmalltOpentEconomy 13-1
Partt7tShort-RuntEconomictFluctuations
Chaptert14tAggregatetDemandtandtAggregatetSupply 14-1
Chaptert15tThetInfluencetoftMonetarytandtFiscaltPolicytontAggregatetDemand 15-1
Chaptert16tThetShort-RuntTradeofftbetweentInflationtandtUnemployment 16-1
Partt8tFinaltThoughts
Chaptert17tFivetDebatestovertMacroeconomictPolicy 17-1
iii
, PREFACE
Intmosttpost-secondarytcourses,tatlargetpercentagetoftstudenttassessmenttistbasedtontmultiple-
tchoicettesting.tManytinstructorstusetmultiple-
choicetreluctantly,tbelievingtthattittistatmethodologytbesttusedtforttestingtwhattatstudenttremember
strathertthantwhattshetorthethastlearned.
NelsontEducationtLtd.tunderstandstthattatgoodtqualitytmultiple-
choicettesttbanktcantprovidetthetmeansttotmeasurethigher-
leveltthinkingtskillstastwelltastrecall.tRecognizingtthetimportancetoftmultiple-
choicettestingtinttoday’stclassroom,twethavetcreatedtNETA—
thetNelsontEducationtTeachingtAdvantagetprogram—
totensuretthetvaluetoftourthightqualityttesttbanks.
ThetNETAtprogramtwastcreatedtintpartnershiptwithtDavidtDiBattista,tat3MtNationaltTeachingtFello
w,tprofessortoftpsychologytattBrocktUniversity,tandtresearchertintthetareatoftmultiple-
tchoicettesting.tNETAtensurestthattsubject-
mattertexpertstwhotauthorttesttbanksthavethadttrainingtinttwotareas:tavoidingtcommonterrorstinttesttc
onstruction,tandtdevelopingtmultiple-
tchoicettesttquestionstthatt“gettbeyondtremembering”ttotassessthigher-leveltthinking.
AlltNETAttesttbankstincludetDavidtDiBattista’stguidetfortinstructors,t“MultipletChoicetTests:tGett
ingtBeyondtRemembering.”tThistguidethastbeentdesignedttotassisttyoutintusingtNelsonttesttbankstt
otachievetyourtdesiredtoutcomestintyourtcourse.
ThetTesttBanktfortPrinciplestoftMacroeconomics,tSixthtCanadiantEditionthastbeentrevisedtfortCan
adiantstudentstbytConstantintColonescu,tMacEwantUniversity.tThetmultiple-
choicetquestionstweretwrittentandteditedttotconformttotNETAtguidelines,twhichtemphasizetthetde
velopmenttofthigher-
ordertthinkingtandttheteffectivetconstructiontoftquestions.tNETAtprinciplestoftquestiontconstructi
onthelpteliminatetambiguity,targuabletanswers,tguesswork,tandtunconscioustcuesttottest-
savvytstudents,tresultingtintattesttthattaccuratelytreflectststudenttunderstanding.tThetTesttBanktoff
erstovert3510tquestions,tincludingtaboutt2822tmultipletchoice,taboutt362ttrue/false,taboutt162tpro
blems,tandtaboutt164tshorttanswertquestions.
Intadditionttotprovidingtatvarietytoftquestionstrelatedttoteachtchaptertobjective,tthisttesttbanktalsote
mploystatseriestofttagstthattcanthelptdesignteffective,tbalancedtteststbytthetmeasuretoftcoursetoutco
mes.tAlltoftthettagstaretincludedtwithtthetquestiontintthettesttbank.tThesettagstinclude:
ANS:tThetcorrecttanswer.t(Suggestedtanswerstaretprovidedtfortthetshorttanswertquestions.)
PTS:tThetnumbertoftpointstantinstructortcantassigntforteachtquestion.tThetdefaulttist1tpoint
.
iv
T
Test Bank t
to accompany
t
TesttBanktpreparedtbytConstant
intColonescutMacEwantUnivers
ity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
t t t t t t t t
Sixth Canadian Edition
t t
BytN.tGregorytMankiwt/tRonaldtD.tKneebonet/tKennethtJ.tMcKenzie
TesttBanktpreparedtbytConstantintColonescu,tMacEwantUniversity
NETAtcopyteditor:tFrancestRobinson
AvailabletontInstructor’stResourcetCDtISBNt.t0-17-655440-8
COPYRIGHTt©2014tbytNelsontEducationtLtd.tNelsontistatregisteredttrademarktusedthereintundertlicence.tAlltrightst
reserved.
FortmoretinformationtcontacttNelson,t1120tBirchmounttRoad,tToronto,tOntariot M1Kt5G4.tOrtyoutcantvisittourtInter
nettsitetattwww.nelson.com.
ALLtRIGHTStRESERVED.tNotparttoftthistworktcoveredtbytthetcopyrightthereontmaytbetreproducedtortusedtintanytfo
rmtortbytanytmeans—
graphic,telectronic,tortmechanical,tincludingtphotocopying,trecording,ttaping,twebtdistributiontortinformationtstorag
etandtretrievaltsystems—withouttthetwrittentpermissiontoftthetpublisher
ii
, TABLE OF CONTENTS
t t
Partt1tIntroduction
Chaptert1tTentPrinciplestoftEconomics 1-1
Chaptert2tThinkingtLiketantEconomist 2-1
Chaptert3tInterdependencetandtthetGainstfromtTrade 3-1
Partt2tSupplytAndtDemand:tHowtMarketstWork
Chaptert4tThetMarkettForcestoftSupplytandtDemand 4-1
Partt3tThetDatatoftMacroeconomics
Chaptert5tMeasuringtatNation’stIncome 5-1
Chaptert6tMeasuringtthetCosttoftLiving 6-1
Partt4tThetRealtEconomytintthetLongtRun
Chaptert7tProductiontandtGrowth 7-1
Chaptert8tSaving,tInvestment,tandtthetFinancialtSystem 8-1
Chaptert9tUnemploymenttandtItstNaturaltRate 9-1
Partt5tMoneytAndtPricestintthetLongtRun
Chaptert10tThetMonetarytSystem 10-1
Chaptert11tMoneytGrowthtandtInflation 11-1
Partt6tThetMacroeconomicstoftOpentEconomies
Chaptert12tOpen-EconomytMacroeconomics:tBasictConcepts 12-1
Chaptert13tAtMacroeconomictTheorytoftthetSmalltOpentEconomy 13-1
Partt7tShort-RuntEconomictFluctuations
Chaptert14tAggregatetDemandtandtAggregatetSupply 14-1
Chaptert15tThetInfluencetoftMonetarytandtFiscaltPolicytontAggregatetDemand 15-1
Chaptert16tThetShort-RuntTradeofftbetweentInflationtandtUnemployment 16-1
Partt8tFinaltThoughts
Chaptert17tFivetDebatestovertMacroeconomictPolicy 17-1
iii
, PREFACE
Intmosttpost-secondarytcourses,tatlargetpercentagetoftstudenttassessmenttistbasedtontmultiple-
tchoicettesting.tManytinstructorstusetmultiple-
choicetreluctantly,tbelievingtthattittistatmethodologytbesttusedtforttestingtwhattatstudenttremember
strathertthantwhattshetorthethastlearned.
NelsontEducationtLtd.tunderstandstthattatgoodtqualitytmultiple-
choicettesttbanktcantprovidetthetmeansttotmeasurethigher-
leveltthinkingtskillstastwelltastrecall.tRecognizingtthetimportancetoftmultiple-
choicettestingtinttoday’stclassroom,twethavetcreatedtNETA—
thetNelsontEducationtTeachingtAdvantagetprogram—
totensuretthetvaluetoftourthightqualityttesttbanks.
ThetNETAtprogramtwastcreatedtintpartnershiptwithtDavidtDiBattista,tat3MtNationaltTeachingtFello
w,tprofessortoftpsychologytattBrocktUniversity,tandtresearchertintthetareatoftmultiple-
tchoicettesting.tNETAtensurestthattsubject-
mattertexpertstwhotauthorttesttbanksthavethadttrainingtinttwotareas:tavoidingtcommonterrorstinttesttc
onstruction,tandtdevelopingtmultiple-
tchoicettesttquestionstthatt“gettbeyondtremembering”ttotassessthigher-leveltthinking.
AlltNETAttesttbankstincludetDavidtDiBattista’stguidetfortinstructors,t“MultipletChoicetTests:tGett
ingtBeyondtRemembering.”tThistguidethastbeentdesignedttotassisttyoutintusingtNelsonttesttbankstt
otachievetyourtdesiredtoutcomestintyourtcourse.
ThetTesttBanktfortPrinciplestoftMacroeconomics,tSixthtCanadiantEditionthastbeentrevisedtfortCan
adiantstudentstbytConstantintColonescu,tMacEwantUniversity.tThetmultiple-
choicetquestionstweretwrittentandteditedttotconformttotNETAtguidelines,twhichtemphasizetthetde
velopmenttofthigher-
ordertthinkingtandttheteffectivetconstructiontoftquestions.tNETAtprinciplestoftquestiontconstructi
onthelpteliminatetambiguity,targuabletanswers,tguesswork,tandtunconscioustcuesttottest-
savvytstudents,tresultingtintattesttthattaccuratelytreflectststudenttunderstanding.tThetTesttBanktoff
erstovert3510tquestions,tincludingtaboutt2822tmultipletchoice,taboutt362ttrue/false,taboutt162tpro
blems,tandtaboutt164tshorttanswertquestions.
Intadditionttotprovidingtatvarietytoftquestionstrelatedttoteachtchaptertobjective,tthisttesttbanktalsote
mploystatseriestofttagstthattcanthelptdesignteffective,tbalancedtteststbytthetmeasuretoftcoursetoutco
mes.tAlltoftthettagstaretincludedtwithtthetquestiontintthettesttbank.tThesettagstinclude:
ANS:tThetcorrecttanswer.t(Suggestedtanswerstaretprovidedtfortthetshorttanswertquestions.)
PTS:tThetnumbertoftpointstantinstructortcantassigntforteachtquestion.tThetdefaulttist1tpoint
.
iv
