NETA ASSESSMENT
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
Sixth Canadian Edition
By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie
Test Bank prepared by Constantin Colonescu, MacEwan University
NETA copy editor: Frances Robinson
Available on Instructor’s Resource CD ISBN . 0-17-655440-8
COPYRIGHT ©2014 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence. All
rights reserved.
For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario M1K 5G4. Or you can visit our
Internet site at www.nelson.com.
ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any
form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, web
distribution or information storage and retrieval systems—without the written permission of the publisher
ii
, TABLE OF CONTENTS
Part m1 mIntroduction
Chapter m1 mTen mPrinciples mof mEconomics 1-1
Chapter m2 mThinking mLike man mEconomist 2-1
Chapter m3 mInterdependence mand mthe mGains mfrom mTrade 3-1
Part m2 mSupply mAnd mDemand: mHow mMarkets mWork
Chapter m4 mThe mMarket mForces mof mSupply mand mDemand 4-1
Part m3 mThe mData mof mMacroeconomics
Chapter m5 mMeasuring ma mNation’s mIncome 5-1
Chapter m6 mMeasuring mthe mCost mof mLiving 6-1
Part m4 mThe mReal mEconomy min mthe mLong mRun
Chapter m7 mProduction mand mGrowth 7-1
Chapter m8 mSaving, mInvestment, mand mthe mFinancial mSystem 8-1
Chapter m9 mUnemployment mand mIts mNatural mRate 9-1
Part m5 mMoney mAnd mPrices min mthe mLong mRun
Chapter m10 mThe mMonetary mSystem 10-1
Chapter m11 mMoney mGrowth mand mInflation 11-1
Part m6 mThe mMacroeconomics mof mOpen mEconomies
Chapter m12 mOpen-Economy mMacroeconomics: mBasic mConcepts 12-1
Chapter m13 mA mMacroeconomic mTheory mof mthe mSmall mOpen mEconomy 13-1
Part m7 mShort-Run mEconomic mFluctuations
Chapter m14 mAggregate mDemand mand mAggregate mSupply 14-1
Chapter m15 mThe mInfluence mof mMonetary mand mFiscal mPolicy mon mAggregate mDemand 15-1
Chapter m16 mThe mShort-Run mTradeoff mbetween mInflation mand mUnemployment 16-1
Part m8 mFinal mThoughts
Chapter m17 mFive mDebates mover mMacroeconomic mPolicy 17-1
iii
, PREFACE
In mmost mpost-secondary mcourses, ma mlarge mpercentage mof mstudent massessment mis mbased mon
mmultiple- m choice mtesting. mMany minstructors muse mmultiple-choice mreluctantly, mbelieving mthat
mit mis ma m methodology mbest mused mfor mtesting mwhat ma mstudent m remembers mrather mthan mwhat
mshe mor mhe mhas m learned.
Nelson mEducation mLtd. munderstands mthat ma mgood mquality mmultiple-choice mtest mbank mcan
mprovide m the mmeans mto mmeasure mhigher-level mthinking mskills mas mwell mas mrecall.
mRecognizing mthe m importance mof mmultiple-choice mtesting min mtoday’s mclassroom, mwe mhave
mcreated mNETA—the m Nelson mEducation mTeaching mAdvantage mprogram—to mensure mthe
mvalue mof mour mhigh mquality mtest m banks.
The mNETA mprogram mwas mcreated min mpartnership mwith mDavid mDiBattista, ma m3M mNational
mTeaching m Fellow, mprofessor mof mpsychology mat mBrock mUniversity, mand mresearcher min mthe
marea mof mmultiple- m choice mtesting. mNETA mensures mthat msubject-matter mexperts mwho mauthor
mtest mbanks mhave mhad m training min mtwo mareas: mavoiding mcommon merrors min mtest
mconstruction, mand mdeveloping mmultiple- m choice mtest mquestions mthat m“get mbeyond
mremembering” mto massess mhigher-level mthinking.
All mNETA mtest mbanks minclude mDavid mDiBattista’s mguide mfor minstructors, m“Multiple mChoice
mTests: m Getting mBeyond mRemembering.” mThis mguide mhas mbeen mdesigned mto massist myou min
musing mNelson m test mbanks mto machieve m your mdesired moutcomes min myour mcourse.
The mTest mBank mfor mPrinciples mof mMacroeconomics, mSixth mCanadian mEdition mhas mbeen
mrevised mfor m Canadian mstudents mby mConstantin mColonescu, mMacEwan mUniversity. mThe
mmultiple-choice m questions mwere mwritten mand medited mto mconform mto mNETA mguidelines,
mwhich memphasize mthe m development mof mhigher-order mthinking mand mthe meffective
mconstruction mof mquestions. mNETA m principles mof mquestion mconstruction mhelp meliminate
mambiguity, marguable manswers, mguesswork, m and munconscious mcues mto mtest-savvy
mstudents, mresulting min ma mtest mthat maccurately mreflects mstudent m understanding. mThe mTest
mBank moffers mover m3510 mquestions, mincluding mabout m2822 mmultiple m choice, mabout m362
mtrue/false, mabout m162 mproblems, mand mabout m164 mshort manswer mquestions.
In maddition mto mproviding ma mvariety mof mquestions mrelated mto meach mchapter mobjective, mthis
mtest mbank m also memploys ma mseries mof mtags mthat mcan mhelp mdesign meffective, mbalanced mtests
mby mthe mmeasure mof m course moutcomes. mAll mof mthe mtags mare mincluded mwith mthe mquestion min
mthe mtest mbank. mThese mtags m include:
• ANS: mThe mcorrect manswer. m(Suggested manswers mare mprovided mfor mthe mshort manswer
4
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
Sixth Canadian Edition
By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie
Test Bank prepared by Constantin Colonescu, MacEwan University
NETA copy editor: Frances Robinson
Available on Instructor’s Resource CD ISBN . 0-17-655440-8
COPYRIGHT ©2014 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence. All
rights reserved.
For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario M1K 5G4. Or you can visit our
Internet site at www.nelson.com.
ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any
form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, web
distribution or information storage and retrieval systems—without the written permission of the publisher
ii
, TABLE OF CONTENTS
Part m1 mIntroduction
Chapter m1 mTen mPrinciples mof mEconomics 1-1
Chapter m2 mThinking mLike man mEconomist 2-1
Chapter m3 mInterdependence mand mthe mGains mfrom mTrade 3-1
Part m2 mSupply mAnd mDemand: mHow mMarkets mWork
Chapter m4 mThe mMarket mForces mof mSupply mand mDemand 4-1
Part m3 mThe mData mof mMacroeconomics
Chapter m5 mMeasuring ma mNation’s mIncome 5-1
Chapter m6 mMeasuring mthe mCost mof mLiving 6-1
Part m4 mThe mReal mEconomy min mthe mLong mRun
Chapter m7 mProduction mand mGrowth 7-1
Chapter m8 mSaving, mInvestment, mand mthe mFinancial mSystem 8-1
Chapter m9 mUnemployment mand mIts mNatural mRate 9-1
Part m5 mMoney mAnd mPrices min mthe mLong mRun
Chapter m10 mThe mMonetary mSystem 10-1
Chapter m11 mMoney mGrowth mand mInflation 11-1
Part m6 mThe mMacroeconomics mof mOpen mEconomies
Chapter m12 mOpen-Economy mMacroeconomics: mBasic mConcepts 12-1
Chapter m13 mA mMacroeconomic mTheory mof mthe mSmall mOpen mEconomy 13-1
Part m7 mShort-Run mEconomic mFluctuations
Chapter m14 mAggregate mDemand mand mAggregate mSupply 14-1
Chapter m15 mThe mInfluence mof mMonetary mand mFiscal mPolicy mon mAggregate mDemand 15-1
Chapter m16 mThe mShort-Run mTradeoff mbetween mInflation mand mUnemployment 16-1
Part m8 mFinal mThoughts
Chapter m17 mFive mDebates mover mMacroeconomic mPolicy 17-1
iii
, PREFACE
In mmost mpost-secondary mcourses, ma mlarge mpercentage mof mstudent massessment mis mbased mon
mmultiple- m choice mtesting. mMany minstructors muse mmultiple-choice mreluctantly, mbelieving mthat
mit mis ma m methodology mbest mused mfor mtesting mwhat ma mstudent m remembers mrather mthan mwhat
mshe mor mhe mhas m learned.
Nelson mEducation mLtd. munderstands mthat ma mgood mquality mmultiple-choice mtest mbank mcan
mprovide m the mmeans mto mmeasure mhigher-level mthinking mskills mas mwell mas mrecall.
mRecognizing mthe m importance mof mmultiple-choice mtesting min mtoday’s mclassroom, mwe mhave
mcreated mNETA—the m Nelson mEducation mTeaching mAdvantage mprogram—to mensure mthe
mvalue mof mour mhigh mquality mtest m banks.
The mNETA mprogram mwas mcreated min mpartnership mwith mDavid mDiBattista, ma m3M mNational
mTeaching m Fellow, mprofessor mof mpsychology mat mBrock mUniversity, mand mresearcher min mthe
marea mof mmultiple- m choice mtesting. mNETA mensures mthat msubject-matter mexperts mwho mauthor
mtest mbanks mhave mhad m training min mtwo mareas: mavoiding mcommon merrors min mtest
mconstruction, mand mdeveloping mmultiple- m choice mtest mquestions mthat m“get mbeyond
mremembering” mto massess mhigher-level mthinking.
All mNETA mtest mbanks minclude mDavid mDiBattista’s mguide mfor minstructors, m“Multiple mChoice
mTests: m Getting mBeyond mRemembering.” mThis mguide mhas mbeen mdesigned mto massist myou min
musing mNelson m test mbanks mto machieve m your mdesired moutcomes min myour mcourse.
The mTest mBank mfor mPrinciples mof mMacroeconomics, mSixth mCanadian mEdition mhas mbeen
mrevised mfor m Canadian mstudents mby mConstantin mColonescu, mMacEwan mUniversity. mThe
mmultiple-choice m questions mwere mwritten mand medited mto mconform mto mNETA mguidelines,
mwhich memphasize mthe m development mof mhigher-order mthinking mand mthe meffective
mconstruction mof mquestions. mNETA m principles mof mquestion mconstruction mhelp meliminate
mambiguity, marguable manswers, mguesswork, m and munconscious mcues mto mtest-savvy
mstudents, mresulting min ma mtest mthat maccurately mreflects mstudent m understanding. mThe mTest
mBank moffers mover m3510 mquestions, mincluding mabout m2822 mmultiple m choice, mabout m362
mtrue/false, mabout m162 mproblems, mand mabout m164 mshort manswer mquestions.
In maddition mto mproviding ma mvariety mof mquestions mrelated mto meach mchapter mobjective, mthis
mtest mbank m also memploys ma mseries mof mtags mthat mcan mhelp mdesign meffective, mbalanced mtests
mby mthe mmeasure mof m course moutcomes. mAll mof mthe mtags mare mincluded mwith mthe mquestion min
mthe mtest mbank. mThese mtags m include:
• ANS: mThe mcorrect manswer. m(Suggested manswers mare mprovided mfor mthe mshort manswer
4
