NETAASSESSMENT
l
Test Bank l
to accompany
l
TestlBanklpreparedlbyl
ConstantinlColonescul
MacEwanlUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
l l l l l l l l
Sixth Canadian Edition
l l
BylN.lGregorylMankiwl/lRonaldlD.lKneebonel/lKennethlJ.lMcKenzie
TestlBanklpreparedlbylConstantinlColonescu,lMacEwanlUniversity
NETAlcopyleditor:lFranceslRobinson
AvailablelonlInstructor’slResourcelCDlISBNl.l0-17-655440-8
COPYRIGHTl©2014lbylNelsonlEducationlLtd.lNelsonlislalregisteredltrademarklusedlhereinlunderllicence.lAlllrightsl
reserved.
ForlmorelinformationlcontactlNelson,l1120lBirchmountlRoad,lToronto,lOntariol M1Kl 5G4.lOrlyoulcanlvisitlourlInter
netlsitelatlwww.nelson.com.
ALLlRIGHTSlRESERVED.lNolpartloflthislworklcoveredlbylthelcopyrightlhereonlmaylbelreproducedlorlusedlinlanylfo
rmlorlbylanylmeans—
graphic,lelectronic,lorlmechanical,lincludinglphotocopying,lrecording,ltaping,lwebldistributionlorlinformationlstorag
elandlretrievallsystems—withoutlthelwrittenlpermissionloflthelpublisher
ii
, TABLE OF CONTENTS
l l
Partl1lIntroduction
Chapterl1lTenlPrinciplesloflEconomics 1-1
Chapterl2lThinkinglLikelanlEconomist 2-1
Chapterl3lInterdependencelandlthelGainslfromlTrade 3-1
Partl2lSupplylAndlDemand:lHowlMarketslWork
Chapterl4lThelMarketlForcesloflSupplylandlDemand 4-1
Partl3lThelDataloflMacroeconomics
Chapterl5lMeasuringlalNation’slIncome 5-1
Chapterl6lMeasuringlthelCostloflLiving 6-1
Partl4lThelReallEconomylinlthelLonglRun
Chapterl7lProductionlandlGrowth 7-1
Chapterl8lSaving,l Investment,landlthelFinanciallSystem 8-1
Chapterl9lUnemploymentlandlItslNaturallRate 9-1
Partl5lMoneylAndlPriceslinlthelLonglRun
Chapterl10lThelMonetarylSystem 10-1
Chapterl11lMoneylGrowthlandlInflation 11-1
Partl6lThelMacroeconomicsloflOpenlEconomies
Chapterl12lOpen-EconomylMacroeconomics:lBasiclConcepts 12-1
Chapterl13lAlMacroeconomiclTheoryloflthelSmalllOpenlEconomy 13-1
Partl7lShort-RunlEconomiclFluctuations
Chapterl14lAggregatelDemandlandlAggregatelSupply 14-1
Chapterl15lThelInfluenceloflMonetarylandlFiscallPolicylonlAggregatelDemand 15-1
Chapterl16lThelShort-RunlTradeofflbetweenlInflationlandlUnemployment 16-1
Partl8lFinallThoughts
Chapterl17lFivelDebatesloverlMacroeconomiclPolicy 17-1
iii
, PREFACE
Inlmostlpost-secondarylcourses,lallargelpercentageloflstudentlassessmentlislbasedlonlmultiple-
lchoiceltesting.lManylinstructorsluselmultiple-
choicelreluctantly,lbelievinglthatlitlislalmethodologylbestlusedlforltestinglwhatlalstudentlremember
slratherlthanlwhatlshelorlhelhasllearned.
NelsonlEducationlLtd.lunderstandslthatlalgoodlqualitylmultiple-
choiceltestlbanklcanlprovidelthelmeansltolmeasurelhigher-
levellthinkinglskillslaslwelllaslrecall.lRecognizinglthelimportanceloflmultiple-
choiceltestinglinltoday’slclassroom,lwelhavelcreatedlNETA—
thelNelsonlEducationlTeachinglAdvantagelprogram—
tolensurelthelvalueloflourlhighlqualityltestlbanks.
ThelNETAlprogramlwaslcreatedlinlpartnershiplwithlDavidlDiBattista,lal3MlNationallTeachinglFell
ow,lprofessorloflpsychologylatlBrocklUniversity,landlresearcherlinlthelarealoflmultiple-
lchoiceltesting.lNETAlensureslthatlsubject-
matterlexpertslwholauthorltestlbankslhavelhadltraininglinltwolareas:lavoidinglcommonlerrorslinltestl
construction,landldevelopinglmultiple-
lchoiceltestlquestionslthatl“getlbeyondlremembering”ltolassesslhigher-levellthinking.
AlllNETAltestlbankslincludelDavidlDiBattista’slguidelforlinstructors,l“MultiplelChoicelTests:lGet
tinglBeyondlRemembering.”lThislguidelhaslbeenldesignedltolassistlyoulinlusinglNelsonltestlbankslt
olachievel yourldesiredloutcomeslinl yourlcourse.
ThelTestlBanklforlPrinciplesloflMacroeconomics,lSixthlCanadianlEditionlhaslbeenlrevisedlforlCan
adianlstudentslbylConstantinlColonescu,lMacEwanlUniversity.lThelmultiple-
choicelquestionslwerelwrittenlandleditedltolconformltolNETAlguidelines,lwhichlemphasizelthelde
velopmentloflhigher-
orderlthinkinglandltheleffectivelconstructionloflquestions.lNETAlprinciplesloflquestionlconstructi
onlhelpleliminatelambiguity,larguablelanswers,lguesswork,landlunconsciouslcuesltoltest-
savvylstudents,lresultinglinlaltestlthatlaccuratelylreflectslstudentlunderstanding.lThelTestlBankloffe
rsloverl3510lquestions,lincludinglaboutl2822lmultiplelchoice,laboutl362ltrue/false,laboutl162lprobl
ems,landlaboutl164lshortlanswerlquestions.
Inladditionltolprovidinglalvarietyloflquestionslrelatedltoleachlchapterlobjective,lthisltestlbanklalsol
employslalserieslofltagslthatlcanlhelpldesignleffective,lbalancedltestslbylthelmeasureloflcourselout
comes.lAlllofltheltagslarelincludedlwithlthelquestionlinltheltestlbank.lTheseltagslinclude:
ANS:lThelcorrectlanswer.l(Suggestedlanswerslarelprovidedlforlthelshortlanswerlquestions.)
PTS:lThelnumberloflpointslanlinstructorlcanlassignlforleachlquestion.lTheldefaultlisl1lpoint
.
iv
l
Test Bank l
to accompany
l
TestlBanklpreparedlbyl
ConstantinlColonescul
MacEwanlUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
l l l l l l l l
Sixth Canadian Edition
l l
BylN.lGregorylMankiwl/lRonaldlD.lKneebonel/lKennethlJ.lMcKenzie
TestlBanklpreparedlbylConstantinlColonescu,lMacEwanlUniversity
NETAlcopyleditor:lFranceslRobinson
AvailablelonlInstructor’slResourcelCDlISBNl.l0-17-655440-8
COPYRIGHTl©2014lbylNelsonlEducationlLtd.lNelsonlislalregisteredltrademarklusedlhereinlunderllicence.lAlllrightsl
reserved.
ForlmorelinformationlcontactlNelson,l1120lBirchmountlRoad,lToronto,lOntariol M1Kl 5G4.lOrlyoulcanlvisitlourlInter
netlsitelatlwww.nelson.com.
ALLlRIGHTSlRESERVED.lNolpartloflthislworklcoveredlbylthelcopyrightlhereonlmaylbelreproducedlorlusedlinlanylfo
rmlorlbylanylmeans—
graphic,lelectronic,lorlmechanical,lincludinglphotocopying,lrecording,ltaping,lwebldistributionlorlinformationlstorag
elandlretrievallsystems—withoutlthelwrittenlpermissionloflthelpublisher
ii
, TABLE OF CONTENTS
l l
Partl1lIntroduction
Chapterl1lTenlPrinciplesloflEconomics 1-1
Chapterl2lThinkinglLikelanlEconomist 2-1
Chapterl3lInterdependencelandlthelGainslfromlTrade 3-1
Partl2lSupplylAndlDemand:lHowlMarketslWork
Chapterl4lThelMarketlForcesloflSupplylandlDemand 4-1
Partl3lThelDataloflMacroeconomics
Chapterl5lMeasuringlalNation’slIncome 5-1
Chapterl6lMeasuringlthelCostloflLiving 6-1
Partl4lThelReallEconomylinlthelLonglRun
Chapterl7lProductionlandlGrowth 7-1
Chapterl8lSaving,l Investment,landlthelFinanciallSystem 8-1
Chapterl9lUnemploymentlandlItslNaturallRate 9-1
Partl5lMoneylAndlPriceslinlthelLonglRun
Chapterl10lThelMonetarylSystem 10-1
Chapterl11lMoneylGrowthlandlInflation 11-1
Partl6lThelMacroeconomicsloflOpenlEconomies
Chapterl12lOpen-EconomylMacroeconomics:lBasiclConcepts 12-1
Chapterl13lAlMacroeconomiclTheoryloflthelSmalllOpenlEconomy 13-1
Partl7lShort-RunlEconomiclFluctuations
Chapterl14lAggregatelDemandlandlAggregatelSupply 14-1
Chapterl15lThelInfluenceloflMonetarylandlFiscallPolicylonlAggregatelDemand 15-1
Chapterl16lThelShort-RunlTradeofflbetweenlInflationlandlUnemployment 16-1
Partl8lFinallThoughts
Chapterl17lFivelDebatesloverlMacroeconomiclPolicy 17-1
iii
, PREFACE
Inlmostlpost-secondarylcourses,lallargelpercentageloflstudentlassessmentlislbasedlonlmultiple-
lchoiceltesting.lManylinstructorsluselmultiple-
choicelreluctantly,lbelievinglthatlitlislalmethodologylbestlusedlforltestinglwhatlalstudentlremember
slratherlthanlwhatlshelorlhelhasllearned.
NelsonlEducationlLtd.lunderstandslthatlalgoodlqualitylmultiple-
choiceltestlbanklcanlprovidelthelmeansltolmeasurelhigher-
levellthinkinglskillslaslwelllaslrecall.lRecognizinglthelimportanceloflmultiple-
choiceltestinglinltoday’slclassroom,lwelhavelcreatedlNETA—
thelNelsonlEducationlTeachinglAdvantagelprogram—
tolensurelthelvalueloflourlhighlqualityltestlbanks.
ThelNETAlprogramlwaslcreatedlinlpartnershiplwithlDavidlDiBattista,lal3MlNationallTeachinglFell
ow,lprofessorloflpsychologylatlBrocklUniversity,landlresearcherlinlthelarealoflmultiple-
lchoiceltesting.lNETAlensureslthatlsubject-
matterlexpertslwholauthorltestlbankslhavelhadltraininglinltwolareas:lavoidinglcommonlerrorslinltestl
construction,landldevelopinglmultiple-
lchoiceltestlquestionslthatl“getlbeyondlremembering”ltolassesslhigher-levellthinking.
AlllNETAltestlbankslincludelDavidlDiBattista’slguidelforlinstructors,l“MultiplelChoicelTests:lGet
tinglBeyondlRemembering.”lThislguidelhaslbeenldesignedltolassistlyoulinlusinglNelsonltestlbankslt
olachievel yourldesiredloutcomeslinl yourlcourse.
ThelTestlBanklforlPrinciplesloflMacroeconomics,lSixthlCanadianlEditionlhaslbeenlrevisedlforlCan
adianlstudentslbylConstantinlColonescu,lMacEwanlUniversity.lThelmultiple-
choicelquestionslwerelwrittenlandleditedltolconformltolNETAlguidelines,lwhichlemphasizelthelde
velopmentloflhigher-
orderlthinkinglandltheleffectivelconstructionloflquestions.lNETAlprinciplesloflquestionlconstructi
onlhelpleliminatelambiguity,larguablelanswers,lguesswork,landlunconsciouslcuesltoltest-
savvylstudents,lresultinglinlaltestlthatlaccuratelylreflectslstudentlunderstanding.lThelTestlBankloffe
rsloverl3510lquestions,lincludinglaboutl2822lmultiplelchoice,laboutl362ltrue/false,laboutl162lprobl
ems,landlaboutl164lshortlanswerlquestions.
Inladditionltolprovidinglalvarietyloflquestionslrelatedltoleachlchapterlobjective,lthisltestlbanklalsol
employslalserieslofltagslthatlcanlhelpldesignleffective,lbalancedltestslbylthelmeasureloflcourselout
comes.lAlllofltheltagslarelincludedlwithlthelquestionlinltheltestlbank.lTheseltagslinclude:
ANS:lThelcorrectlanswer.l(Suggestedlanswerslarelprovidedlforlthelshortlanswerlquestions.)
PTS:lThelnumberloflpointslanlinstructorlcanlassignlforleachlquestion.lTheldefaultlisl1lpoint
.
iv
