NETA ASSESSMENT
Test Bank
to accompany
Test Bank prepared by
Constantinn1Colonescun
1 MacEwann1University
,NETAn1Assessment:n1Testn1Bankn1ton1accompanyn1Principlesn1ofn1Macroeconomics,
Sixthn1Canadiann1Edition
Byn1N.n1Gregoryn1Mankiwn1/n1Ronaldn1D.n1Kneebonen1/n1Kennethn1J.n1McKenzie
Testn1Bankn1preparedn1byn1Constantinn1Colonescu,n1MacEwann1University
NETAn1copyn1editor:n1Francesn1Robinson
Availablen1onn1Instructor’sn1Resourcen1CDn1ISBNn1.n10-17-655440-8
COPYRIGHTn1©2014n1byn1Nelsonn1Educationn1Ltd.n1Nelsonn1isn1an1registeredn1trademarkn1usedn1hereinn1undern1lice
nce.n1Alln 1 rightsn1reserved.
Forn1moren1informationn1contactn1Nelson,n11120n1Birchmountn1Road,n1Toronto,n1Ontarion 1 M1Kn15G4.n1Orn1youn1c
ann1visitn1ourn 1 Internetn1siten1atn1www.nelson.com.
ALLn1RIGHTSn1RESERVED.n1Non1partn1ofn1thisn1workn1coveredn1byn1then1copyrightn1hereonn1mayn1ben1reproducedn1o
rn1usedn1inn 1 anyn1formn1orn1byn1anyn1means—
graphic,n1electronic,n1orn1mechanical,n1includingn1photocopying,n1recording,n1taping,n1webn 1 distributionn1orn1info
rmationn1storagen1andn1retrievaln1systems—withoutn1then1writtenn1permissionn1ofn1then1publisher
ii
, TABLEn1OFn1CONTENTS
Partn11n1Introduction
Chaptern11n1Tenn1Principlesn1ofn1Economics 1-1
Chaptern12n1Thinkingn1Liken1ann1Economist 2-1
Chaptern13n1Interdependencen1andn1then1Gainsn1fromn1Trade 3-1
Partn12n1Supplyn1Andn1Demand:n1Hown1Marketsn1Work
Chaptern14n1Then1Marketn1Forcesn1ofn1Supplyn1andn1Demand 4-1
Partn13n1Then1Datan1ofn1Macroeconomics
Chaptern15n1Measuringn1an1Nation’sn1Income 5-1
Chaptern16n1Measuringn1then1Costn1ofn1Living 6-1
Partn14n1Then1Realn1Economyn1inn1then1Longn1Run
Chaptern17n1Productionn1andn1Growth 7-1
Chaptern18n1Saving,n1Investment,n1andn1then1Financialn1System 8-1
Chaptern19n1Unemploymentn1andn1Itsn1Naturaln1Rate 9-1
Partn15n1Moneyn1Andn1Pricesn1inn1then1Longn1Run
Chaptern110n1Then1Monetaryn1System 10-1
Chaptern111n1Moneyn1Growthn1andn1Inflation 11-1
Partn16n1Then1Macroeconomicsn1ofn1Openn1Economies
Chaptern112n1Open-Economyn1Macroeconomics:n1Basicn1Concepts 12-1
Chaptern113n1An1Macroeconomicn1Theoryn1ofn1then1Smalln1Openn1Economy 13-1
Partn17n1Short-Runn1Economicn1Fluctuations
Chaptern114n1Aggregaten1Demandn1andn1Aggregaten1Supply 14-1
Chaptern115n1Then1Influencen1ofn1Monetaryn1andn1Fiscaln1Policyn1onn1Aggregaten1Demand 15-1
Chaptern116n1Then1Short-Runn1Tradeoffn1betweenn1Inflationn1andn1Unemployment 16-1
Partn18n1Finaln1Thoughts
Chaptern117n1Fiven1Debatesn1overn1Macroeconomicn1Policy 17-1
iii
, PREFACE
Inn1mostn1post-
secondaryn1courses,n1an1largen1percentagen1ofn1studentn1assessmentn1isn1basedn1onn1multiple-
n 1 choicen1testing.n1Manyn1instructorsn1usen1multiple-
choicen1reluctantly,n1believingn1thatn1itn1isn1an 1 methodologyn1bestn1usedn1forn1testingn1whatn1an1st
udentn1remembersn1rathern1thann1whatn1shen1orn1hen1hasn 1 learned.
Nelsonn1Educationn1Ltd.n1understandsn1thatn1an1goodn1qualityn1multiple-
choicen1testn1bankn1cann1providen 1 then1meansn1ton1measuren1higher-
leveln1thinkingn1skillsn1asn1welln1asn1recall.n1Recognizingn1then 1 importancen1ofn1multiple-
choicen1testingn1inn1today’sn1classroom,n1wen1haven1createdn1NETA—
then 1 Nelsonn1Educationn1Teachingn1Advantagen1program—
ton1ensuren1then1valuen1ofn1ourn1highn1qualityn1testn 1 banks.
Then1NETAn1programn1wasn1createdn1inn1partnershipn1withn1Davidn1DiBattista,n1an13Mn1Nationaln1T
eachingn 1 Fellow,n1professorn1ofn1psychologyn1atn1Brockn1University,n1andn1researchern1inn1then1ar
ean1ofn1multiple-n 1 choicen1testing.n1NETAn1ensuresn1thatn1subject-
mattern1expertsn1whon1authorn1testn1banksn1haven1hadn 1 trainingn1inn1twon1areas:n1avoidingn1com
monn1errorsn1inn1testn1construction,n1andn1developingn1multiple-
n 1 choicen1testn1questionsn1thatn1“getn1beyondn1remembering”n1ton1assessn1higher-leveln1thinking.
Alln1NETAn1testn1banksn1includen1Davidn1DiBattista’sn1guiden1forn1instructors,n1“Multiplen1Choicen1
Tests:n 1 Gettingn1Beyondn1Remembering.”n1Thisn1guiden1hasn1beenn1designedn1ton1assistn1youn1i
nn1usingn1Nelsonn 1 testn1banksn1ton1achieven1yourn1desiredn1outcomesn1inn1yourn1course.
Then1Testn1Bankn1forn1Principlesn1ofn1Macroeconomics,n1Sixthn1Canadiann1Editionn1hasn1beenn1rev
isedn1forn 1 Canadiann1studentsn1byn1Constantinn1Colonescu,n1MacEwann1University.n1Then1multip
le-
choicen 1 questionsn1weren1writtenn1andn1editedn1ton1conformn1ton1NETAn1guidelines,n1whichn1e
mphasizen1then 1 developmentn1ofn1higher-
ordern1thinkingn1andn1then1effectiven1constructionn1ofn1questions.n1NETAn 1 principlesn1ofn1questi
onn1constructionn1helpn1eliminaten1ambiguity,n1arguablen1answers,n1guesswork,n 1 andn1uncons
ciousn1cuesn1ton1test-
savvyn1students,n1resultingn1inn1an1testn1thatn1accuratelyn1reflectsn1studentn 1 understanding.n1Th
en1Testn1Bankn1offersn1overn13510n1questions,n1includingn1aboutn12822n1multiplen 1 choice,n1abou
tn1362n1true/false,n1aboutn1162n1problems,n1andn1aboutn1164n1shortn1answern1questions.
Inn1additionn1ton1providingn1an1varietyn1ofn1questionsn1relatedn1ton1eachn1chaptern1objective,n1thisn1
4
Test Bank
to accompany
Test Bank prepared by
Constantinn1Colonescun
1 MacEwann1University
,NETAn1Assessment:n1Testn1Bankn1ton1accompanyn1Principlesn1ofn1Macroeconomics,
Sixthn1Canadiann1Edition
Byn1N.n1Gregoryn1Mankiwn1/n1Ronaldn1D.n1Kneebonen1/n1Kennethn1J.n1McKenzie
Testn1Bankn1preparedn1byn1Constantinn1Colonescu,n1MacEwann1University
NETAn1copyn1editor:n1Francesn1Robinson
Availablen1onn1Instructor’sn1Resourcen1CDn1ISBNn1.n10-17-655440-8
COPYRIGHTn1©2014n1byn1Nelsonn1Educationn1Ltd.n1Nelsonn1isn1an1registeredn1trademarkn1usedn1hereinn1undern1lice
nce.n1Alln 1 rightsn1reserved.
Forn1moren1informationn1contactn1Nelson,n11120n1Birchmountn1Road,n1Toronto,n1Ontarion 1 M1Kn15G4.n1Orn1youn1c
ann1visitn1ourn 1 Internetn1siten1atn1www.nelson.com.
ALLn1RIGHTSn1RESERVED.n1Non1partn1ofn1thisn1workn1coveredn1byn1then1copyrightn1hereonn1mayn1ben1reproducedn1o
rn1usedn1inn 1 anyn1formn1orn1byn1anyn1means—
graphic,n1electronic,n1orn1mechanical,n1includingn1photocopying,n1recording,n1taping,n1webn 1 distributionn1orn1info
rmationn1storagen1andn1retrievaln1systems—withoutn1then1writtenn1permissionn1ofn1then1publisher
ii
, TABLEn1OFn1CONTENTS
Partn11n1Introduction
Chaptern11n1Tenn1Principlesn1ofn1Economics 1-1
Chaptern12n1Thinkingn1Liken1ann1Economist 2-1
Chaptern13n1Interdependencen1andn1then1Gainsn1fromn1Trade 3-1
Partn12n1Supplyn1Andn1Demand:n1Hown1Marketsn1Work
Chaptern14n1Then1Marketn1Forcesn1ofn1Supplyn1andn1Demand 4-1
Partn13n1Then1Datan1ofn1Macroeconomics
Chaptern15n1Measuringn1an1Nation’sn1Income 5-1
Chaptern16n1Measuringn1then1Costn1ofn1Living 6-1
Partn14n1Then1Realn1Economyn1inn1then1Longn1Run
Chaptern17n1Productionn1andn1Growth 7-1
Chaptern18n1Saving,n1Investment,n1andn1then1Financialn1System 8-1
Chaptern19n1Unemploymentn1andn1Itsn1Naturaln1Rate 9-1
Partn15n1Moneyn1Andn1Pricesn1inn1then1Longn1Run
Chaptern110n1Then1Monetaryn1System 10-1
Chaptern111n1Moneyn1Growthn1andn1Inflation 11-1
Partn16n1Then1Macroeconomicsn1ofn1Openn1Economies
Chaptern112n1Open-Economyn1Macroeconomics:n1Basicn1Concepts 12-1
Chaptern113n1An1Macroeconomicn1Theoryn1ofn1then1Smalln1Openn1Economy 13-1
Partn17n1Short-Runn1Economicn1Fluctuations
Chaptern114n1Aggregaten1Demandn1andn1Aggregaten1Supply 14-1
Chaptern115n1Then1Influencen1ofn1Monetaryn1andn1Fiscaln1Policyn1onn1Aggregaten1Demand 15-1
Chaptern116n1Then1Short-Runn1Tradeoffn1betweenn1Inflationn1andn1Unemployment 16-1
Partn18n1Finaln1Thoughts
Chaptern117n1Fiven1Debatesn1overn1Macroeconomicn1Policy 17-1
iii
, PREFACE
Inn1mostn1post-
secondaryn1courses,n1an1largen1percentagen1ofn1studentn1assessmentn1isn1basedn1onn1multiple-
n 1 choicen1testing.n1Manyn1instructorsn1usen1multiple-
choicen1reluctantly,n1believingn1thatn1itn1isn1an 1 methodologyn1bestn1usedn1forn1testingn1whatn1an1st
udentn1remembersn1rathern1thann1whatn1shen1orn1hen1hasn 1 learned.
Nelsonn1Educationn1Ltd.n1understandsn1thatn1an1goodn1qualityn1multiple-
choicen1testn1bankn1cann1providen 1 then1meansn1ton1measuren1higher-
leveln1thinkingn1skillsn1asn1welln1asn1recall.n1Recognizingn1then 1 importancen1ofn1multiple-
choicen1testingn1inn1today’sn1classroom,n1wen1haven1createdn1NETA—
then 1 Nelsonn1Educationn1Teachingn1Advantagen1program—
ton1ensuren1then1valuen1ofn1ourn1highn1qualityn1testn 1 banks.
Then1NETAn1programn1wasn1createdn1inn1partnershipn1withn1Davidn1DiBattista,n1an13Mn1Nationaln1T
eachingn 1 Fellow,n1professorn1ofn1psychologyn1atn1Brockn1University,n1andn1researchern1inn1then1ar
ean1ofn1multiple-n 1 choicen1testing.n1NETAn1ensuresn1thatn1subject-
mattern1expertsn1whon1authorn1testn1banksn1haven1hadn 1 trainingn1inn1twon1areas:n1avoidingn1com
monn1errorsn1inn1testn1construction,n1andn1developingn1multiple-
n 1 choicen1testn1questionsn1thatn1“getn1beyondn1remembering”n1ton1assessn1higher-leveln1thinking.
Alln1NETAn1testn1banksn1includen1Davidn1DiBattista’sn1guiden1forn1instructors,n1“Multiplen1Choicen1
Tests:n 1 Gettingn1Beyondn1Remembering.”n1Thisn1guiden1hasn1beenn1designedn1ton1assistn1youn1i
nn1usingn1Nelsonn 1 testn1banksn1ton1achieven1yourn1desiredn1outcomesn1inn1yourn1course.
Then1Testn1Bankn1forn1Principlesn1ofn1Macroeconomics,n1Sixthn1Canadiann1Editionn1hasn1beenn1rev
isedn1forn 1 Canadiann1studentsn1byn1Constantinn1Colonescu,n1MacEwann1University.n1Then1multip
le-
choicen 1 questionsn1weren1writtenn1andn1editedn1ton1conformn1ton1NETAn1guidelines,n1whichn1e
mphasizen1then 1 developmentn1ofn1higher-
ordern1thinkingn1andn1then1effectiven1constructionn1ofn1questions.n1NETAn 1 principlesn1ofn1questi
onn1constructionn1helpn1eliminaten1ambiguity,n1arguablen1answers,n1guesswork,n 1 andn1uncons
ciousn1cuesn1ton1test-
savvyn1students,n1resultingn1inn1an1testn1thatn1accuratelyn1reflectsn1studentn 1 understanding.n1Th
en1Testn1Bankn1offersn1overn13510n1questions,n1includingn1aboutn12822n1multiplen 1 choice,n1abou
tn1362n1true/false,n1aboutn1162n1problems,n1andn1aboutn1164n1shortn1answern1questions.
Inn1additionn1ton1providingn1an1varietyn1ofn1questionsn1relatedn1ton1eachn1chaptern1objective,n1thisn1
4
