NETAASSESSMENT
7
b
Test Bank b7
to accompany
b7
Test Bank prepared
b7 b7
b7by Constantin
b7
b7 Colonescu MacEwan b7
University
b7
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
b7 b7 b7 b7 b7 b7 b7 b7
Sixth Canadian Edition
b7 b7
By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Test Bank prepared by Constantin Colonescu, MacEwan University
b7 b7 b7 b7 b7 b7 b7
NETA copy editor: Frances Robinson
b7 b7 b7 b7
Available on Instructor’s Resource CD ISBN . 0-17-655440-8
b7 b7 b7 b7 b7 b7 b7
COPYRIGHT ©2014 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence.
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
All
b7 rights reserved.
b 7 b7
For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 M1K 5G4. Or you can
b7 b7 b7 b7
visit our
b7 b7Internet site at www.nelson.com.
b 7 b7 b7 b7
ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
used in
b7 any form or by any means—graphic, electronic, or mechanical, including photocopying,
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
recording, taping, web
b7 distribution or information storage and retrieval systems—without the written
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
permission of the publisher
b7 b7 b7 b7
ii
, TABLE OF CONTENTS b7 b7
Part 1 Introduction
b7 b7
Chapter 1 Ten Principles of Economics
b7 b7 b7 b7 b7 1-1
Chapter 2 Thinking Like an Economist
b7 b7 b7 b7 b7 2-1
Chapter 3 Interdependence and the Gains from Trade
b7 b7 b7 b7 b7 b7 b7 3-1
Part 2 Supply And Demand: How Markets Work
b7 b7 b7 b7 b7 b7 b7
Chapter 4 The Market Forces of Supply and Demand
b7 b7 b7 b7 b7 b7 b7 b7 4-1
Part 3 The Data of Macroeconomics
b7 b7 b7 b7 b7
Chapter 5 Measuring a Nation’s Income
b7 b7 b7 b7 b7 5-1
Chapter 6 Measuring the Cost of Living
b7 b7 b7 b7 b7 b7 6-1
Part 4 The Real Economy in the Long Run
b7 b7 b7 b7 b7 b7 b7 b7
Chapter 7 Production and Growth
b7 b7 b7 b7 7-1
Chapter 8 Saving, Investment, and the Financial System
b7 b7 b7 b7 b7 b7 b7 8-1
Chapter 9 Unemployment and Its Natural Rate
b7 b7 b7 b7 b7 b7 9-1
Part 5 Money And Prices in the Long Run
b7 b7 b7 b7 b7 b7 b7 b7
Chapter 10 The Monetary System
b7 b7 b7 b7 10-1
Chapter 11 Money Growth and Inflation
b7 b7 b7 b7 b7 11-1
Part 6 The Macroeconomics of Open Economies
b7 b7 b7 b7 b7 b7
Chapter 12 Open-Economy Macroeconomics: Basic Concepts
b7 b7 b7 b7 b7 12-1
Chapter 13 A Macroeconomic Theory of the Small Open Economy
b7 b7 b7 b7 b7 b7 b7 b7 b7 13-1
Part 7 Short-Run Economic Fluctuations
b7 b7 b7 b7
Chapter 14 Aggregate Demand and Aggregate Supply
b7 b7 b7 b7 b7 b7 14-1
Chapter 15 The Influence of Monetary and Fiscal Policy on Aggregate Demand
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 15-1
Chapter 16 The Short-Run Tradeoff between Inflation and Unemployment
b7 b7 b7 b7 b7 b7 b7 b7 16-1
Part 8 Final Thoughts
b7 b7 b7
Chapter 17 Five Debates over Macroeconomic Policy
b7 b7 b7 b7 b7 b7 17-1
iii
, PREFACE
In most post-secondary courses, a large percentage of student assessment is based on
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
multiple- choice testing. Many instructors use multiple-choice reluctantly, believing that
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
it is a methodology best used for testing what a student remembers rather than what
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
she or he has learned.
b7 b7 b7 b7 b 7
Nelson Education Ltd. understands that a good quality multiple-choice test bank can
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
provide the means to measure higher-level thinking skills as well as recall.
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Recognizing the importance of multiple-choice testing in today’s classroom, we have
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
created NETA—the Nelson Education Teaching Advantage program—to ensure the
b7 b7 b 7 b7 b7 b7 b7 b7 b7
value of our high quality test banks.
b7 b7 b7 b7 b7 b7 b 7
The NETA program was created in partnership with David DiBattista, a 3M National
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Teaching Fellow, professor of psychology at Brock University, and researcher in the
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
area of multiple- choice testing. NETA ensures that subject-matter experts who author
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
test banks have had
b7 b7 training in two areas: avoiding common errors in test
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
construction, and developing multiple- choice test questions that “get beyond
b7 b7 b7 b7 b 7 b7 b7 b7 b7 b7
remembering” to assess higher-level thinking.
b7 b7 b7 b7 b7
All NETA test banks include David DiBattista’s guide for instructors, “Multiple Choice
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Tests: Getting Beyond Remembering.” This guide has been designed to assist you in
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
using Nelson test banks to achieve your desired outcomes in your course.
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7
The Test Bank for Principles of Macroeconomics, Sixth Canadian Edition has been
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
revised for Canadian students by Constantin Colonescu, MacEwan University. The
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7
multiple-choice questions were written and edited to conform to NETA guidelines,
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7
which emphasize the development of higher-order thinking and the effective
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7
construction of questions. NETA principles of question construction help eliminate
b7 b7 b7 b7 b 7 b7 b7 b7 b7 b7
ambiguity, arguable answers, guesswork,
b7 and unconscious cues to test-savvy
b7 b7 b7 b 7 b7 b7 b7 b7
students, resulting in a test that accurately reflects student understanding. The Test
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 b7 b7
Bank offers over 3510 questions, including about 2822 multiple choice, about 362
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 b7 b7
true/false, about 162 problems, and about 164 short answer questions.
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
In addition to providing a variety of questions related to each chapter objective, this test
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
bank
b7 also employs a series of tags that can help design effective, balanced tests by
b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
the measure of course outcomes. All of the tags are included with the question in
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
the test bank. These tags include:
b7 b7 b7 b7 b7 b 7
ANS: The correct answer. (Suggested answers are provided for the short answer
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
4
7
b
Test Bank b7
to accompany
b7
Test Bank prepared
b7 b7
b7by Constantin
b7
b7 Colonescu MacEwan b7
University
b7
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
b7 b7 b7 b7 b7 b7 b7 b7
Sixth Canadian Edition
b7 b7
By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Test Bank prepared by Constantin Colonescu, MacEwan University
b7 b7 b7 b7 b7 b7 b7
NETA copy editor: Frances Robinson
b7 b7 b7 b7
Available on Instructor’s Resource CD ISBN . 0-17-655440-8
b7 b7 b7 b7 b7 b7 b7
COPYRIGHT ©2014 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence.
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
All
b7 rights reserved.
b 7 b7
For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 M1K 5G4. Or you can
b7 b7 b7 b7
visit our
b7 b7Internet site at www.nelson.com.
b 7 b7 b7 b7
ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
used in
b7 any form or by any means—graphic, electronic, or mechanical, including photocopying,
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
recording, taping, web
b7 distribution or information storage and retrieval systems—without the written
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
permission of the publisher
b7 b7 b7 b7
ii
, TABLE OF CONTENTS b7 b7
Part 1 Introduction
b7 b7
Chapter 1 Ten Principles of Economics
b7 b7 b7 b7 b7 1-1
Chapter 2 Thinking Like an Economist
b7 b7 b7 b7 b7 2-1
Chapter 3 Interdependence and the Gains from Trade
b7 b7 b7 b7 b7 b7 b7 3-1
Part 2 Supply And Demand: How Markets Work
b7 b7 b7 b7 b7 b7 b7
Chapter 4 The Market Forces of Supply and Demand
b7 b7 b7 b7 b7 b7 b7 b7 4-1
Part 3 The Data of Macroeconomics
b7 b7 b7 b7 b7
Chapter 5 Measuring a Nation’s Income
b7 b7 b7 b7 b7 5-1
Chapter 6 Measuring the Cost of Living
b7 b7 b7 b7 b7 b7 6-1
Part 4 The Real Economy in the Long Run
b7 b7 b7 b7 b7 b7 b7 b7
Chapter 7 Production and Growth
b7 b7 b7 b7 7-1
Chapter 8 Saving, Investment, and the Financial System
b7 b7 b7 b7 b7 b7 b7 8-1
Chapter 9 Unemployment and Its Natural Rate
b7 b7 b7 b7 b7 b7 9-1
Part 5 Money And Prices in the Long Run
b7 b7 b7 b7 b7 b7 b7 b7
Chapter 10 The Monetary System
b7 b7 b7 b7 10-1
Chapter 11 Money Growth and Inflation
b7 b7 b7 b7 b7 11-1
Part 6 The Macroeconomics of Open Economies
b7 b7 b7 b7 b7 b7
Chapter 12 Open-Economy Macroeconomics: Basic Concepts
b7 b7 b7 b7 b7 12-1
Chapter 13 A Macroeconomic Theory of the Small Open Economy
b7 b7 b7 b7 b7 b7 b7 b7 b7 13-1
Part 7 Short-Run Economic Fluctuations
b7 b7 b7 b7
Chapter 14 Aggregate Demand and Aggregate Supply
b7 b7 b7 b7 b7 b7 14-1
Chapter 15 The Influence of Monetary and Fiscal Policy on Aggregate Demand
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 15-1
Chapter 16 The Short-Run Tradeoff between Inflation and Unemployment
b7 b7 b7 b7 b7 b7 b7 b7 16-1
Part 8 Final Thoughts
b7 b7 b7
Chapter 17 Five Debates over Macroeconomic Policy
b7 b7 b7 b7 b7 b7 17-1
iii
, PREFACE
In most post-secondary courses, a large percentage of student assessment is based on
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
multiple- choice testing. Many instructors use multiple-choice reluctantly, believing that
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
it is a methodology best used for testing what a student remembers rather than what
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
she or he has learned.
b7 b7 b7 b7 b 7
Nelson Education Ltd. understands that a good quality multiple-choice test bank can
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
provide the means to measure higher-level thinking skills as well as recall.
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Recognizing the importance of multiple-choice testing in today’s classroom, we have
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
created NETA—the Nelson Education Teaching Advantage program—to ensure the
b7 b7 b 7 b7 b7 b7 b7 b7 b7
value of our high quality test banks.
b7 b7 b7 b7 b7 b7 b 7
The NETA program was created in partnership with David DiBattista, a 3M National
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Teaching Fellow, professor of psychology at Brock University, and researcher in the
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
area of multiple- choice testing. NETA ensures that subject-matter experts who author
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
test banks have had
b7 b7 training in two areas: avoiding common errors in test
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7
construction, and developing multiple- choice test questions that “get beyond
b7 b7 b7 b7 b 7 b7 b7 b7 b7 b7
remembering” to assess higher-level thinking.
b7 b7 b7 b7 b7
All NETA test banks include David DiBattista’s guide for instructors, “Multiple Choice
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
Tests: Getting Beyond Remembering.” This guide has been designed to assist you in
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
using Nelson test banks to achieve your desired outcomes in your course.
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7
The Test Bank for Principles of Macroeconomics, Sixth Canadian Edition has been
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
revised for Canadian students by Constantin Colonescu, MacEwan University. The
b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7
multiple-choice questions were written and edited to conform to NETA guidelines,
b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7
which emphasize the development of higher-order thinking and the effective
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7
construction of questions. NETA principles of question construction help eliminate
b7 b7 b7 b7 b 7 b7 b7 b7 b7 b7
ambiguity, arguable answers, guesswork,
b7 and unconscious cues to test-savvy
b7 b7 b7 b 7 b7 b7 b7 b7
students, resulting in a test that accurately reflects student understanding. The Test
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 b7 b7
Bank offers over 3510 questions, including about 2822 multiple choice, about 362
b7 b7 b7 b7 b7 b7 b7 b7 b7 b 7 b7 b7
true/false, about 162 problems, and about 164 short answer questions.
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
In addition to providing a variety of questions related to each chapter objective, this test
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
bank
b7 also employs a series of tags that can help design effective, balanced tests by
b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
the measure of course outcomes. All of the tags are included with the question in
b7 b7 b7 b 7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
the test bank. These tags include:
b7 b7 b7 b7 b7 b 7
ANS: The correct answer. (Suggested answers are provided for the short answer
b7 b7 b7 b7 b7 b7 b7 b7 b7 b7 b7
4
