NETA Assessment: Test Bank to accompany Principles of Macroeconomics, Sixth Canadian Edition By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie A+

NETA ssASSESSMENT
Test ssBank
to ssaccompany




Test ssBank
ssprepared ssby
s s Constantin
ssColonescu
ssMacEwan
ssUniversity

,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
Sixth Canadian Edition

By ssN. ssGregory ssMankiw ss/ ssRonald ssD. ssKneebone ss/ ssKenneth ssJ.
ssMcKenzie



Test ssBank ssprepared ssby ssConstantin ssColonescu, ssMacEwan ssUniversity



NETA sscopy sseditor: ssFrances ssRobinson


Available sson ssInstructor’s ssResource ssCD ssISBN ss. ss0-17-655440-8

COPYRIGHT ss©2014 ssby ssNelson ssEducation ssLtd. ssNelson ssis ssa
ssregistered sstrademark ssused ssherein ssunder sslicence. ssAll s s rights
ssreserved.

For ssmore ssinformation sscontact ssNelson, ss1120 ssBirchmount ssRoad,
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ALL ssRIGHTS ssRESERVED. ssNo sspart ssof ssthis sswork sscovered ssby ssthe
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ssthe sspublisher



ii

, TABLE ssOF ssCONTENTS

Part ss1 ssIntroduction
Chapter ss1 ssTen ssPrinciples ssof ssEconomics 1-1
Chapter ss2 ssThinking ssLike ssan ssEconomist 2-1
Chapter ss3 ssInterdependence ssand ssthe ssGains ssfrom ssTrade 3-1

Part ss2 ssSupply ssAnd ssDemand: ssHow ssMarkets ssWork
Chapter ss4 ssThe ssMarket ssForces ssof ssSupply ssand ssDemand 4-1

Part ss3 ssThe ssData ssof ssMacroeconomics
Chapter ss5 ssMeasuring ssa ssNation’s ssIncome 5-1
Chapter ss6 ssMeasuring ssthe ssCost ssof ssLiving 6-1

Part ss4 ssThe ssReal ssEconomy ssin ssthe ssLong ssRun
Chapter ss7 ssProduction ssand ssGrowth 7-1
Chapter ss8 ssSaving, ssInvestment, ssand ssthe ssFinancial ssSystem 8-1
Chapter ss9 ssUnemployment ssand ssIts ssNatural ssRate 9-1

Part ss5 ssMoney ssAnd ssPrices ssin ssthe ssLong ssRun
Chapter ss10 ssThe ssMonetary ssSystem 10-1
Chapter ss11 ssMoney ssGrowth ssand ssInflation 11-1

Part ss6 ssThe ssMacroeconomics ssof ssOpen ssEconomies
Chapter ss12 ssOpen-Economy ssMacroeconomics: ssBasic ssConcepts 12-1
Chapter ss13 ssA ssMacroeconomic ssTheory ssof ssthe ssSmall ssOpen
ssEconomy 13-1

Part ss7 ssShort-Run ssEconomic ssFluctuations
Chapter ss14 ssAggregate ssDemand ssand ssAggregate ssSupply 14-1
Chapter ss15 ssThe ssInfluence ssof ssMonetary ssand ssFiscal ssPolicy sson
ssAggregate ssDemand 15-1
Chapter ss16 ssThe ssShort-Run ssTradeoff ssbetween ssInflation ssand
ssUnemployment 16-1

Part ss8 ssFinal ssThoughts
Chapter ss17 ssFive ssDebates ssover ssMacroeconomic ssPolicy 17-1




iii

, PREFACE




In ssmost sspost-secondary sscourses, ssa sslarge sspercentage ssof ssstudent
ssassessment ssis ssbased sson ssmultiple- s s choice sstesting. ssMany
ssinstructors ssuse ssmultiple-choice ssreluctantly, ssbelieving ssthat ssit ssis ssa
s s methodology ssbest ssused ssfor sstesting sswhat ssa ssstudent ssremembers
ssrather ssthan sswhat ssshe ssor sshe sshas s s learned.

Nelson ssEducation ssLtd. ssunderstands ssthat ssa ssgood ssquality ssmultiple-
choice sstest ssbank sscan ssprovide s s the ssmeans ssto ssmeasure sshigher-
level ssthinking ssskills ssas sswell ssas ssrecall. ssRecognizing ssthe
s s importance ssof ssmultiple-choice sstesting ssin sstoday’s ssclassroom, sswe
sshave sscreated ssNETA—the s s Nelson ssEducation ssTeaching ssAdvantage
ssprogram—to ssensure ssthe ssvalue ssof ssour sshigh ssquality sstest
s s banks.

The ssNETA ssprogram sswas sscreated ssin sspartnership sswith ssDavid
ssDiBattista, ssa ss3M ssNational ssTeaching s s Fellow, ssprofessor ssof
sspsychology ssat ssBrock ssUniversity, ssand ssresearcher ssin ssthe ssarea ssof
ssmultiple- s s choice sstesting. ssNETA ssensures ssthat sssubject-matter
ssexperts sswho ssauthor sstest ssbanks sshave sshad s s training ssin sstwo
ssareas: ssavoiding sscommon sserrors ssin sstest ssconstruction, ssand
ssdeveloping ssmultiple- s s choice sstest ssquestions ssthat ss“get ssbeyond
ssremembering” ssto ssassess sshigher-level ssthinking.

All ssNETA sstest ssbanks ssinclude ssDavid ssDiBattista’s ssguide ssfor
ssinstructors, ss“Multiple ssChoice ssTests: s s Getting ssBeyond
ssRemembering.” ssThis ssguide sshas ssbeen ssdesigned ssto ssassist ssyou
ssin ssusing ssNelson s s test ssbanks ssto ssachieve ssyour ssdesired
ssoutcomes ssin ssyour sscourse.

The ssTest ssBank ssfor ssPrinciples ssof ssMacroeconomics, ssSixth ssCanadian
ssEdition sshas ssbeen ssrevised ssfor s s Canadian ssstudents ssby ssConstantin
ssColonescu, ssMacEwan ssUniversity. ssThe ssmultiple-choice s s questions
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