NETA ASSESSMENT
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETA5vAssessment:5vTest5vBank5vto5vaccompany5vPrinciples5vof5vMacroeconomics,
Sixth5vCanadian5vEdition
By5vN.5vGregory5vMankiw5v/5vRonald5vD.5vKneebone5v/5vKenneth5vJ.5vMcKenzie
Test5vBank5vprepared5vby5vConstantin5vColonescu,5vMacEwan5vUniversity
NETA5vcopy5veditor:5vFrances5vRobinson
Available5von5vInstructor’s5vResource5vCD5vISBN5v.5v0-17-655440-8
COPYRIGHT5v©20145vby5vNelson5vEducation5vLtd.5vNelson5vis5va5vregistered5vtrademark5vused5vherein5vunder5vlicen
ce.5vAll5 v rights5vreserved.
For5vmore5vinformation5vcontact5vNelson,5v11205vBirchmount5vRoad,5vToronto,5vOntario5 v M1K5v5G4.5vOr5vyou5vca
n5vvisit5vour5 v Internet5vsite5vat5vwww.nelson.com.
ALL5vRIGHTS5vRESERVED.5vNo5vpart5vof5vthis5vwork5vcovered5vby5vthe5vcopyright5vhereon5vmay5vbe5vreproduced5vor5
vused5vin5 v any5vform5vor5vby5vany5vmeans—
graphic,5velectronic,5vor5vmechanical,5vincluding5vphotocopying,5vrecording,5vtaping,5vweb5 v distribution5vor5vinfor
mation5vstorage5vand5vretrieval5vsystems—without5vthe5vwritten5vpermission5vof5vthe5vpublisher
ii
, TABLE5vOF5vCONTENTS
Part5v15vIntroduction
Chapter5v15vTen5vPrinciples5vof5vEconomics 1-1
Chapter5v25vThinking5vLike5van5vEconomist 2-1
Chapter5v35vInterdependence5vand5vthe5vGains5vfrom5vTrade 3-1
Part5v25vSupply5vAnd5vDemand:5vHow5vMarkets5vWork
Chapter5v45vThe5vMarket5vForces5vof5vSupply5vand5vDemand 4-1
Part5v35vThe5vData5vof5vMacroeconomics
Chapter5v55vMeasuring5va5vNation’s5vIncome 5-1
Chapter5v65vMeasuring5vthe5vCost5vof5vLiving 6-1
Part5v45vThe5vReal5vEconomy5vin5vthe5vLong5vRun
Chapter5v75vProduction5vand5vGrowth 7-1
Chapter5v85vSaving,5vInvestment,5vand5vthe5vFinancial5vSystem 8-1
Chapter5v95vUnemployment5vand5vIts5vNatural5vRate 9-1
Part5v55vMoney5vAnd5vPrices5vin5vthe5vLong5vRun
Chapter5v105vThe5vMonetary5vSystem 10-1
Chapter5v115vMoney5vGrowth5vand5vInflation 11-1
Part5v65vThe5vMacroeconomics5vof5vOpen5vEconomies
Chapter5v125vOpen-Economy5vMacroeconomics:5vBasic5vConcepts 12-1
Chapter5v135vA5vMacroeconomic5vTheory5vof5vthe5vSmall5vOpen5vEconomy 13-1
Part5v75vShort-Run5vEconomic5vFluctuations
Chapter5v145vAggregate5vDemand5vand5vAggregate5vSupply 14-1
Chapter5v155vThe5vInfluence5vof5vMonetary5vand5vFiscal5vPolicy5von5vAggregate5vDemand 15-1
Chapter5v165vThe5vShort-Run5vTradeoff5vbetween5vInflation5vand5vUnemployment 16-1
Part5v85vFinal5vThoughts
Chapter5v175vFive5vDebates5vover5vMacroeconomic5vPolicy 17-1
iii
, PREFACE
In5vmost5vpost-
secondary5vcourses,5va5vlarge5vpercentage5vof5vstudent5vassessment5vis5vbased5von5vmultiple-
5 v choice5vtesting.5vMany5vinstructors5vuse5vmultiple-
choice5vreluctantly,5vbelieving5vthat5vit5vis5va5 v methodology5vbest5vused5vfor5vtesting5vwhat5va5vstu
dent5vremembers5vrather5vthan5vwhat5vshe5vor5vhe5vhas5 v learned.
Nelson5vEducation5vLtd.5vunderstands5vthat5va5vgood5vquality5vmultiple-
choice5vtest5vbank5vcan5vprovide5 v the5vmeans5vto5vmeasure5vhigher-
level5vthinking5vskills5vas5vwell5vas5vrecall.5vRecognizing5vthe5 v importance5vof5vmultiple-
choice5vtesting5vin5vtoday’s5vclassroom,5vwe5vhave5vcreated5vNETA—
the5 v Nelson5vEducation5vTeaching5vAdvantage5vprogram—
to5vensure5vthe5vvalue5vof5vour5vhigh5vquality5vtest5 v banks.
The5vNETA5vprogram5vwas5vcreated5vin5vpartnership5vwith5vDavid5vDiBattista,5va5v3M5vNational5vTe
aching5 v Fellow,5vprofessor5vof5vpsychology5vat5vBrock5vUniversity,5vand5vresearcher5vin5vthe5varea
5vof5vmultiple-5 v choice5vtesting.5vNETA5vensures5vthat5vsubject-
matter5vexperts5vwho5vauthor5vtest5vbanks5vhave5vhad5 v training5vin5vtwo5vareas:5vavoiding5vcom
mon5verrors5vin5vtest5vconstruction,5vand5vdeveloping5vmultiple-
5 v choice5vtest5vquestions5vthat5v“get5vbeyond5vremembering”5vto5vassess5vhigher-level5vthinking.
All5vNETA5vtest5vbanks5vinclude5vDavid5vDiBattista’s5vguide5vfor5vinstructors,5v“Multiple5vChoice5vT
ests:5 v Getting5vBeyond5vRemembering.”5vThis5vguide5vhas5vbeen5vdesigned5vto5vassist5vyou5vin5v
using5vNelson5 v test5vbanks5vto5vachieve5vyour5vdesired5voutcomes5vin5v your5vcourse.
The5vTest5vBank5vfor5vPrinciples5vof5vMacroeconomics,5vSixth5vCanadian5vEdition5vhas5vbeen5vrevi
sed5vfor5 v Canadian5vstudents5vby5vConstantin5vColonescu,5vMacEwan5vUniversity.5vThe5vmultipl
e-
choice5 v questions5vwere5vwritten5vand5vedited5vto5vconform5vto5vNETA5vguidelines,5vwhich5vem
phasize5vthe5 v development5vof5vhigher-
order5vthinking5vand5vthe5veffective5vconstruction5vof5vquestions.5vNETA5 v principles5vof5vquestio
n5vconstruction5vhelp5veliminate5vambiguity,5varguable5vanswers,5vguesswork,5 v and5vunconscio
us5vcues5vto5vtest-
savvy5vstudents,5vresulting5vin5va5vtest5vthat5vaccurately5vreflects5vstudent5 v understanding.5vThe5
vTest5vBank5voffers5vover5v35105vquestions,5vincluding5vabout5v28225vmultiple5 v choice,5vabout5v3
625vtrue/false,5vabout5v1625vproblems,5vand5vabout5v1645vshort5vanswer5vquestions.
In5vaddition5vto5vproviding5va5vvariety5vof5vquestions5vrelated5vto5veach5vchapter5vobjective,5vthis5vt
4
Test Bank
to accompany
Test Bank prepared by
Constantin Colonescu
MacEwan University
,NETA5vAssessment:5vTest5vBank5vto5vaccompany5vPrinciples5vof5vMacroeconomics,
Sixth5vCanadian5vEdition
By5vN.5vGregory5vMankiw5v/5vRonald5vD.5vKneebone5v/5vKenneth5vJ.5vMcKenzie
Test5vBank5vprepared5vby5vConstantin5vColonescu,5vMacEwan5vUniversity
NETA5vcopy5veditor:5vFrances5vRobinson
Available5von5vInstructor’s5vResource5vCD5vISBN5v.5v0-17-655440-8
COPYRIGHT5v©20145vby5vNelson5vEducation5vLtd.5vNelson5vis5va5vregistered5vtrademark5vused5vherein5vunder5vlicen
ce.5vAll5 v rights5vreserved.
For5vmore5vinformation5vcontact5vNelson,5v11205vBirchmount5vRoad,5vToronto,5vOntario5 v M1K5v5G4.5vOr5vyou5vca
n5vvisit5vour5 v Internet5vsite5vat5vwww.nelson.com.
ALL5vRIGHTS5vRESERVED.5vNo5vpart5vof5vthis5vwork5vcovered5vby5vthe5vcopyright5vhereon5vmay5vbe5vreproduced5vor5
vused5vin5 v any5vform5vor5vby5vany5vmeans—
graphic,5velectronic,5vor5vmechanical,5vincluding5vphotocopying,5vrecording,5vtaping,5vweb5 v distribution5vor5vinfor
mation5vstorage5vand5vretrieval5vsystems—without5vthe5vwritten5vpermission5vof5vthe5vpublisher
ii
, TABLE5vOF5vCONTENTS
Part5v15vIntroduction
Chapter5v15vTen5vPrinciples5vof5vEconomics 1-1
Chapter5v25vThinking5vLike5van5vEconomist 2-1
Chapter5v35vInterdependence5vand5vthe5vGains5vfrom5vTrade 3-1
Part5v25vSupply5vAnd5vDemand:5vHow5vMarkets5vWork
Chapter5v45vThe5vMarket5vForces5vof5vSupply5vand5vDemand 4-1
Part5v35vThe5vData5vof5vMacroeconomics
Chapter5v55vMeasuring5va5vNation’s5vIncome 5-1
Chapter5v65vMeasuring5vthe5vCost5vof5vLiving 6-1
Part5v45vThe5vReal5vEconomy5vin5vthe5vLong5vRun
Chapter5v75vProduction5vand5vGrowth 7-1
Chapter5v85vSaving,5vInvestment,5vand5vthe5vFinancial5vSystem 8-1
Chapter5v95vUnemployment5vand5vIts5vNatural5vRate 9-1
Part5v55vMoney5vAnd5vPrices5vin5vthe5vLong5vRun
Chapter5v105vThe5vMonetary5vSystem 10-1
Chapter5v115vMoney5vGrowth5vand5vInflation 11-1
Part5v65vThe5vMacroeconomics5vof5vOpen5vEconomies
Chapter5v125vOpen-Economy5vMacroeconomics:5vBasic5vConcepts 12-1
Chapter5v135vA5vMacroeconomic5vTheory5vof5vthe5vSmall5vOpen5vEconomy 13-1
Part5v75vShort-Run5vEconomic5vFluctuations
Chapter5v145vAggregate5vDemand5vand5vAggregate5vSupply 14-1
Chapter5v155vThe5vInfluence5vof5vMonetary5vand5vFiscal5vPolicy5von5vAggregate5vDemand 15-1
Chapter5v165vThe5vShort-Run5vTradeoff5vbetween5vInflation5vand5vUnemployment 16-1
Part5v85vFinal5vThoughts
Chapter5v175vFive5vDebates5vover5vMacroeconomic5vPolicy 17-1
iii
, PREFACE
In5vmost5vpost-
secondary5vcourses,5va5vlarge5vpercentage5vof5vstudent5vassessment5vis5vbased5von5vmultiple-
5 v choice5vtesting.5vMany5vinstructors5vuse5vmultiple-
choice5vreluctantly,5vbelieving5vthat5vit5vis5va5 v methodology5vbest5vused5vfor5vtesting5vwhat5va5vstu
dent5vremembers5vrather5vthan5vwhat5vshe5vor5vhe5vhas5 v learned.
Nelson5vEducation5vLtd.5vunderstands5vthat5va5vgood5vquality5vmultiple-
choice5vtest5vbank5vcan5vprovide5 v the5vmeans5vto5vmeasure5vhigher-
level5vthinking5vskills5vas5vwell5vas5vrecall.5vRecognizing5vthe5 v importance5vof5vmultiple-
choice5vtesting5vin5vtoday’s5vclassroom,5vwe5vhave5vcreated5vNETA—
the5 v Nelson5vEducation5vTeaching5vAdvantage5vprogram—
to5vensure5vthe5vvalue5vof5vour5vhigh5vquality5vtest5 v banks.
The5vNETA5vprogram5vwas5vcreated5vin5vpartnership5vwith5vDavid5vDiBattista,5va5v3M5vNational5vTe
aching5 v Fellow,5vprofessor5vof5vpsychology5vat5vBrock5vUniversity,5vand5vresearcher5vin5vthe5varea
5vof5vmultiple-5 v choice5vtesting.5vNETA5vensures5vthat5vsubject-
matter5vexperts5vwho5vauthor5vtest5vbanks5vhave5vhad5 v training5vin5vtwo5vareas:5vavoiding5vcom
mon5verrors5vin5vtest5vconstruction,5vand5vdeveloping5vmultiple-
5 v choice5vtest5vquestions5vthat5v“get5vbeyond5vremembering”5vto5vassess5vhigher-level5vthinking.
All5vNETA5vtest5vbanks5vinclude5vDavid5vDiBattista’s5vguide5vfor5vinstructors,5v“Multiple5vChoice5vT
ests:5 v Getting5vBeyond5vRemembering.”5vThis5vguide5vhas5vbeen5vdesigned5vto5vassist5vyou5vin5v
using5vNelson5 v test5vbanks5vto5vachieve5vyour5vdesired5voutcomes5vin5v your5vcourse.
The5vTest5vBank5vfor5vPrinciples5vof5vMacroeconomics,5vSixth5vCanadian5vEdition5vhas5vbeen5vrevi
sed5vfor5 v Canadian5vstudents5vby5vConstantin5vColonescu,5vMacEwan5vUniversity.5vThe5vmultipl
e-
choice5 v questions5vwere5vwritten5vand5vedited5vto5vconform5vto5vNETA5vguidelines,5vwhich5vem
phasize5vthe5 v development5vof5vhigher-
order5vthinking5vand5vthe5veffective5vconstruction5vof5vquestions.5vNETA5 v principles5vof5vquestio
n5vconstruction5vhelp5veliminate5vambiguity,5varguable5vanswers,5vguesswork,5 v and5vunconscio
us5vcues5vto5vtest-
savvy5vstudents,5vresulting5vin5va5vtest5vthat5vaccurately5vreflects5vstudent5 v understanding.5vThe5
vTest5vBank5voffers5vover5v35105vquestions,5vincluding5vabout5v28225vmultiple5 v choice,5vabout5v3
625vtrue/false,5vabout5v1625vproblems,5vand5vabout5v1645vshort5vanswer5vquestions.
In5vaddition5vto5vproviding5va5vvariety5vof5vquestions5vrelated5vto5veach5vchapter5vobjective,5vthis5vt
4
