Test Bank For Principles of Macroeconomics, 6th Edition by N. Gregory Mankiw

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
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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