NETA ASSESSMENT
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETAl2Assessment:l2Testl2Bankl2tol2accompanyl2Principlesl2ofl2Macroeconomics,
Sixthl2Canadianl2Edition
Byl2N.l2Gregoryl2Mankiwl2/l2Ronaldl2D.l2Kneebonel2/l2Kennethl2J.l2McKenzie
Testl2Bankl2preparedl2byl2Constantinl2Colonescu,l2MacEwanl2University
NETAl2copyl2editor:l2Francesl2Robinson
Availablel2onl2Instructor’sl2Resourcel2CDl2ISBNl2.l20-17-655440-8
COPYRIGHTl2©2014l2byl2Nelsonl2Educationl2Ltd.l2Nelsonl2isl2al2registeredl2trademarkl2usedl2hereinl2underl2licence.l2A
lll 2 rightsl2reserved.
Forl2morel2informationl2contactl2Nelson,l21120l2Birchmountl2Road,l2Toronto,l2Ontariol 2 M1Kl25G4.l2Orl2youl2canl2visi
tl2ourl 2 Internetl2sitel2atl2www.nelson.com.
ALLl2RIGHTSl2RESERVED.l2Nol2partl2ofl2thisl2workl2coveredl2byl2thel2copyrightl2hereonl2mayl2bel2reproducedl2orl2usedl
2inl 2 anyl2forml2orl2byl2anyl2means—
graphic,l2electronic,l2orl2mechanical,l2includingl2photocopying,l2recording,l2taping,l2webl 2 distributionl2orl2informa
tionl2storagel2andl2retrievall2systems—withoutl2thel2writtenl2permissionl2ofl2thel2publisher
ii
, TABLEl2OFl2CONTENTS
Partl21l2Introduction
Chapterl21l2Tenl2Principlesl2ofl2Economics 1-1
Chapterl22l2Thinkingl2Likel2anl2Economist 2-1
Chapterl23l2Interdependencel2andl2thel2Gainsl2froml2Trade 3-1
Partl22l2Supplyl2Andl2Demand:l2Howl2Marketsl2Work
Chapterl24l2Thel2Marketl2Forcesl2ofl2Supplyl2andl2Demand 4-1
Partl23l2Thel2Datal2ofl2Macroeconomics
Chapterl25l2Measuringl2al2Nation’sl2Income 5-1
Chapterl26l2Measuringl2thel2Costl2ofl2Living 6-1
Partl24l2Thel2Reall2Economyl2inl2thel2Longl2Run
Chapterl27l2Productionl2andl2Growth 7-1
Chapterl28l2Saving,l2Investment,l2andl2thel2Financiall2System 8-1
Chapterl29l2Unemploymentl2andl2Itsl2Naturall2Rate 9-1
Partl25l2Moneyl2Andl2Pricesl2inl2thel2Longl2Run
Chapterl210l2Thel2Monetaryl2System 10-1
Chapterl211l2Moneyl2Growthl2andl2Inflation 11-1
Partl26l2Thel2Macroeconomicsl2ofl2Openl2Economies
Chapterl212l2Open-Economyl2Macroeconomics:l2Basicl2Concepts 12-1
Chapterl213l2Al2Macroeconomicl2Theoryl2ofl2thel2Smalll2Openl2Economy 13-1
Partl27l2Short-Runl2Economicl2Fluctuations
Chapterl214l2Aggregatel2Demandl2andl2Aggregatel2Supply 14-1
Chapterl215l2Thel2Influencel2ofl2Monetaryl2andl2Fiscall2Policyl2onl2Aggregatel2Demand 15-1
Chapterl216l2Thel2Short-Runl2Tradeoffl2betweenl2Inflationl2andl2Unemployment 16-1
Partl28l2Finall2Thoughts
Chapterl217l2Fivel2Debatesl2overl2Macroeconomicl2Policy 17-1
iii
, PREFACE
Inl2mostl2post-
secondaryl2courses,l2al2largel2percentagel2ofl2studentl2assessmentl2isl2basedl2onl2multiple-
l 2 choicel2testing.l2Manyl2instructorsl2usel2multiple-
choicel2reluctantly,l2believingl2thatl2itl2isl2al 2 methodologyl2bestl2usedl2forl2testingl2whatl2al2studen
tl2remembersl2ratherl2thanl2whatl2shel2orl2hel2hasl 2 learned.
Nelsonl2Educationl2Ltd.l2understandsl2thatl2al2goodl2qualityl2multiple-
choicel2testl2bankl2canl2providel 2 thel2meansl2tol2measurel2higher-
levell2thinkingl2skillsl2asl2welll2asl2recall.l2Recognizingl2thel 2 importancel2ofl2multiple-
choicel2testingl2inl2today’sl2classroom,l2wel2havel2createdl2NETA—
thel 2 Nelsonl2Educationl2Teachingl2Advantagel2program—
tol2ensurel2thel2valuel2ofl2ourl2highl2qualityl2testl 2 banks.
Thel2NETAl2programl2wasl2createdl2inl2partnershipl2withl2Davidl2DiBattista,l2al23Ml2Nationall2Teachi
ngl 2 Fellow,l2professorl2ofl2psychologyl2atl2Brockl2University,l2andl2researcherl2inl2thel2areal2ofl2mul
tiple-l 2 choicel2testing.l2NETAl2ensuresl2thatl2subject-
matterl2expertsl2whol2authorl2testl2banksl2havel2hadl 2 trainingl2inl2twol2areas:l2avoidingl2commonl
2errorsl2inl2testl2construction,l2andl2developingl2multiple-
l 2 choicel2testl2questionsl2thatl2“getl2beyondl2remembering”l2tol2assessl2higher-levell2thinking.
Alll2NETAl2testl2banksl2includel2Davidl2DiBattista’sl2guidel2forl2instructors,l2“Multiplel2Choicel2Test
s:l 2 Gettingl2Beyondl2Remembering.”l2Thisl2guidel2hasl2beenl2designedl2tol2assistl2youl2inl2usingl2
Nelsonl 2 testl2banksl2tol2achievel2yourl2desiredl2outcomesl2inl2yourl2course.
Thel2Testl2Bankl2forl2Principlesl2ofl2Macroeconomics,l2Sixthl2Canadianl2Editionl2hasl2beenl2revisedl
2forl 2 Canadianl2studentsl2byl2Constantinl2Colonescu,l2MacEwanl2University.l2Thel2multiple-
choicel 2 questionsl2werel2writtenl2andl2editedl2tol2conforml2tol2NETAl2guidelines,l2whichl2empha
sizel2thel 2 developmentl2ofl2higher-
orderl2thinkingl2andl2thel2effectivel2constructionl2ofl2questions.l2NETAl 2 principlesl2ofl2questionl2
constructionl2helpl2eliminatel2ambiguity,l2arguablel2answers,l2guesswork,l 2 andl2unconsciousl2c
uesl2tol2test-
savvyl2students,l2resultingl2inl2al2testl2thatl2accuratelyl2reflectsl2studentl 2 understanding.l2Thel2Te
stl2Bankl2offersl2overl23510l2questions,l2includingl2aboutl22822l2multiplel 2 choice,l2aboutl2362l2tru
e/false,l2aboutl2162l2problems,l2andl2aboutl2164l2shortl2answerl2questions.
Inl2additionl2tol2providingl2al2varietyl2ofl2questionsl2relatedl2tol2eachl2chapterl2objective,l2thisl2testl2
bankl 2 alsol2employsl2al2seriesl2ofl2tagsl2thatl2canl2helpl2designl2effective,l2balancedl2testsl2byl2thel2
4
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETAl2Assessment:l2Testl2Bankl2tol2accompanyl2Principlesl2ofl2Macroeconomics,
Sixthl2Canadianl2Edition
Byl2N.l2Gregoryl2Mankiwl2/l2Ronaldl2D.l2Kneebonel2/l2Kennethl2J.l2McKenzie
Testl2Bankl2preparedl2byl2Constantinl2Colonescu,l2MacEwanl2University
NETAl2copyl2editor:l2Francesl2Robinson
Availablel2onl2Instructor’sl2Resourcel2CDl2ISBNl2.l20-17-655440-8
COPYRIGHTl2©2014l2byl2Nelsonl2Educationl2Ltd.l2Nelsonl2isl2al2registeredl2trademarkl2usedl2hereinl2underl2licence.l2A
lll 2 rightsl2reserved.
Forl2morel2informationl2contactl2Nelson,l21120l2Birchmountl2Road,l2Toronto,l2Ontariol 2 M1Kl25G4.l2Orl2youl2canl2visi
tl2ourl 2 Internetl2sitel2atl2www.nelson.com.
ALLl2RIGHTSl2RESERVED.l2Nol2partl2ofl2thisl2workl2coveredl2byl2thel2copyrightl2hereonl2mayl2bel2reproducedl2orl2usedl
2inl 2 anyl2forml2orl2byl2anyl2means—
graphic,l2electronic,l2orl2mechanical,l2includingl2photocopying,l2recording,l2taping,l2webl 2 distributionl2orl2informa
tionl2storagel2andl2retrievall2systems—withoutl2thel2writtenl2permissionl2ofl2thel2publisher
ii
, TABLEl2OFl2CONTENTS
Partl21l2Introduction
Chapterl21l2Tenl2Principlesl2ofl2Economics 1-1
Chapterl22l2Thinkingl2Likel2anl2Economist 2-1
Chapterl23l2Interdependencel2andl2thel2Gainsl2froml2Trade 3-1
Partl22l2Supplyl2Andl2Demand:l2Howl2Marketsl2Work
Chapterl24l2Thel2Marketl2Forcesl2ofl2Supplyl2andl2Demand 4-1
Partl23l2Thel2Datal2ofl2Macroeconomics
Chapterl25l2Measuringl2al2Nation’sl2Income 5-1
Chapterl26l2Measuringl2thel2Costl2ofl2Living 6-1
Partl24l2Thel2Reall2Economyl2inl2thel2Longl2Run
Chapterl27l2Productionl2andl2Growth 7-1
Chapterl28l2Saving,l2Investment,l2andl2thel2Financiall2System 8-1
Chapterl29l2Unemploymentl2andl2Itsl2Naturall2Rate 9-1
Partl25l2Moneyl2Andl2Pricesl2inl2thel2Longl2Run
Chapterl210l2Thel2Monetaryl2System 10-1
Chapterl211l2Moneyl2Growthl2andl2Inflation 11-1
Partl26l2Thel2Macroeconomicsl2ofl2Openl2Economies
Chapterl212l2Open-Economyl2Macroeconomics:l2Basicl2Concepts 12-1
Chapterl213l2Al2Macroeconomicl2Theoryl2ofl2thel2Smalll2Openl2Economy 13-1
Partl27l2Short-Runl2Economicl2Fluctuations
Chapterl214l2Aggregatel2Demandl2andl2Aggregatel2Supply 14-1
Chapterl215l2Thel2Influencel2ofl2Monetaryl2andl2Fiscall2Policyl2onl2Aggregatel2Demand 15-1
Chapterl216l2Thel2Short-Runl2Tradeoffl2betweenl2Inflationl2andl2Unemployment 16-1
Partl28l2Finall2Thoughts
Chapterl217l2Fivel2Debatesl2overl2Macroeconomicl2Policy 17-1
iii
, PREFACE
Inl2mostl2post-
secondaryl2courses,l2al2largel2percentagel2ofl2studentl2assessmentl2isl2basedl2onl2multiple-
l 2 choicel2testing.l2Manyl2instructorsl2usel2multiple-
choicel2reluctantly,l2believingl2thatl2itl2isl2al 2 methodologyl2bestl2usedl2forl2testingl2whatl2al2studen
tl2remembersl2ratherl2thanl2whatl2shel2orl2hel2hasl 2 learned.
Nelsonl2Educationl2Ltd.l2understandsl2thatl2al2goodl2qualityl2multiple-
choicel2testl2bankl2canl2providel 2 thel2meansl2tol2measurel2higher-
levell2thinkingl2skillsl2asl2welll2asl2recall.l2Recognizingl2thel 2 importancel2ofl2multiple-
choicel2testingl2inl2today’sl2classroom,l2wel2havel2createdl2NETA—
thel 2 Nelsonl2Educationl2Teachingl2Advantagel2program—
tol2ensurel2thel2valuel2ofl2ourl2highl2qualityl2testl 2 banks.
Thel2NETAl2programl2wasl2createdl2inl2partnershipl2withl2Davidl2DiBattista,l2al23Ml2Nationall2Teachi
ngl 2 Fellow,l2professorl2ofl2psychologyl2atl2Brockl2University,l2andl2researcherl2inl2thel2areal2ofl2mul
tiple-l 2 choicel2testing.l2NETAl2ensuresl2thatl2subject-
matterl2expertsl2whol2authorl2testl2banksl2havel2hadl 2 trainingl2inl2twol2areas:l2avoidingl2commonl
2errorsl2inl2testl2construction,l2andl2developingl2multiple-
l 2 choicel2testl2questionsl2thatl2“getl2beyondl2remembering”l2tol2assessl2higher-levell2thinking.
Alll2NETAl2testl2banksl2includel2Davidl2DiBattista’sl2guidel2forl2instructors,l2“Multiplel2Choicel2Test
s:l 2 Gettingl2Beyondl2Remembering.”l2Thisl2guidel2hasl2beenl2designedl2tol2assistl2youl2inl2usingl2
Nelsonl 2 testl2banksl2tol2achievel2yourl2desiredl2outcomesl2inl2yourl2course.
Thel2Testl2Bankl2forl2Principlesl2ofl2Macroeconomics,l2Sixthl2Canadianl2Editionl2hasl2beenl2revisedl
2forl 2 Canadianl2studentsl2byl2Constantinl2Colonescu,l2MacEwanl2University.l2Thel2multiple-
choicel 2 questionsl2werel2writtenl2andl2editedl2tol2conforml2tol2NETAl2guidelines,l2whichl2empha
sizel2thel 2 developmentl2ofl2higher-
orderl2thinkingl2andl2thel2effectivel2constructionl2ofl2questions.l2NETAl 2 principlesl2ofl2questionl2
constructionl2helpl2eliminatel2ambiguity,l2arguablel2answers,l2guesswork,l 2 andl2unconsciousl2c
uesl2tol2test-
savvyl2students,l2resultingl2inl2al2testl2thatl2accuratelyl2reflectsl2studentl 2 understanding.l2Thel2Te
stl2Bankl2offersl2overl23510l2questions,l2includingl2aboutl22822l2multiplel 2 choice,l2aboutl2362l2tru
e/false,l2aboutl2162l2problems,l2andl2aboutl2164l2shortl2answerl2questions.
Inl2additionl2tol2providingl2al2varietyl2ofl2questionsl2relatedl2tol2eachl2chapterl2objective,l2thisl2testl2
bankl 2 alsol2employsl2al2seriesl2ofl2tagsl2thatl2canl2helpl2designl2effective,l2balancedl2testsl2byl2thel2
4
