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