NETAASSESSMENTA
Test Bank A
to accompany
A
TestABankApreparedAby
A ConstantinAColonescu
MacEwanAUniversity
A
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
A A A A A A A A
Sixth Canadian Edition
A A
ByAN.AGregoryAMankiwA/ARonaldAD.AKneeboneA/AKennethAJ.AMcKenzie
TestABankApreparedAbyAConstantinAColonescu,AMacEwanAUniversity
NETAAcopyAeditor:AFrancesARobinson
AvailableAonAInstructor’sAResourceACDAISBNA.A0-17-655440-8
COPYRIGHTA©2014AbyANelsonAEducationALtd.ANelsonAisAaAregisteredAtrademarkAusedAhereinAunderAlicence.AAllA ri
ghtsAreserved.
ForAmoreAinformationAcontactANelson,A1120ABirchmountARoad,AToronto,AOntarioA M1KA5G4.AOrAyouAcanAvisitAour
A InternetAsiteAatAwww.nelson.com.
ALLARIGHTSARESERVED.ANoApartAofAthisAworkAcoveredAbyAtheAcopyrightAhereonAmayAbeAreproducedAorAusedAinA a
nyAformAorAbyAanyAmeans—
graphic,Aelectronic,AorAmechanical,AincludingAphotocopying,Arecording,Ataping,AwebA distributionAorAinformationA
storageAandAretrievalAsystems—withoutAtheAwrittenApermissionAofAtheApublisher
ii
, TABLE OF CONTENTS
A A
PartA1AIntroduction
ChapterA1ATenAPrinciplesAofAEconomics 1-1
ChapterA2AThinkingALikeAanAEconomist 2-1
ChapterA3AInterdependenceAandAtheAGainsAfromATrade 3-1
PartA2ASupplyAAndADemand:AHowAMarketsAWork
ChapterA4ATheAMarketAForcesAofASupplyAandADemand 4-1
PartA3ATheADataAofAMacroeconomics
ChapterA5AMeasuringAaANation’sAIncome 5-1
ChapterA6AMeasuringAtheACostAofALiving 6-1
PartA4ATheARealAEconomyAinAtheALongARun
ChapterA7AProductionAandAGrowth 7-1
ChapterA8ASaving,AInvestment,AandAtheAFinancialASystem 8-1
ChapterA9AUnemploymentAandAItsANaturalARate 9-1
PartA5AMoneyAAndAPricesAinAtheALongARun
ChapterA10ATheAMonetaryASystem 10-1
ChapterA11AMoneyAGrowthAandAInflation 11-1
PartA6ATheAMacroeconomicsAofAOpenAEconomies
ChapterA12AOpen-EconomyAMacroeconomics:ABasicAConcepts 12-1
ChapterA13AAAMacroeconomicATheoryAofAtheASmallAOpenAEconomy 13-1
PartA7AShort-RunAEconomicAFluctuations
ChapterA14AAggregateADemandAandAAggregateASupply 14-1
ChapterA15ATheAInfluenceAofAMonetaryAandAFiscalAPolicyAonAAggregateADemand 15-1
ChapterA16ATheAShort-RunATradeoffAbetweenAInflationAandAUnemployment 16-1
PartA8AFinalAThoughts
ChapterA17AFiveADebatesAoverAMacroeconomicAPolicy 17-1
iii
, PREFACE
InAmostApost-
secondaryAcourses,AaAlargeApercentageAofAstudentAassessmentAisAbasedAonAmultiple-
A choiceAtesting.AManyAinstructorsAuseAmultiple-
choiceAreluctantly,AbelievingAthatAitAisAaA methodologyAbestAusedAforAtestingAwhatAaAstudentArem
embersAratherAthanAwhatAsheAorAheAhasA learned.
NelsonAEducationALtd.AunderstandsAthatAaAgoodAqualityAmultiple-
choiceAtestAbankAcanAprovideA theAmeansAtoAmeasureAhigher-
levelAthinkingAskillsAasAwellAasArecall.ARecognizingAtheA importanceAofAmultiple-
choiceAtestingAinAtoday’sAclassroom,AweAhaveAcreatedANETA—
theA NelsonAEducationATeachingAAdvantageAprogram—
toAensureAtheAvalueAofAourAhighAqualityAtestA banks.
TheANETAAprogramAwasAcreatedAinApartnershipAwithADavidADiBattista,AaA3MANationalATeachingA
Fellow,AprofessorAofApsychologyAatABrockAUniversity,AandAresearcherAinAtheAareaAofAmultiple-
A choiceAtesting.ANETAAensuresAthatAsubject-
matterAexpertsAwhoAauthorAtestAbanksAhaveAhadA trainingAinAtwoAareas:AavoidingAcommonAerror
sAinAtestAconstruction,AandAdevelopingAmultiple-
A choiceAtestAquestionsAthatA“getAbeyondAremembering”AtoAassessAhigher-levelAthinking.
AllANETAAtestAbanksAincludeADavidADiBattista’sAguideAforAinstructors,A“MultipleAChoiceATests:A
GettingABeyondARemembering.”AThisAguideAhasAbeenAdesignedAtoAassistAyouAinAusingANelsonA t
estAbanksAtoAachieveAyourAdesiredAoutcomesAinAyourAcourse.
TheATestABankAforAPrinciplesAofAMacroeconomics,ASixthACanadianAEditionAhasAbeenArevisedAfor
A CanadianAstudentsAbyAConstantinAColonescu,AMacEwanAUniversity.ATheAmultiple-
choiceA questionsAwereAwrittenAandAeditedAtoAconformAtoANETAAguidelines,AwhichAemphasizeA
theA developmentAofAhigher-
orderAthinkingAandAtheAeffectiveAconstructionAofAquestions.ANETAA principlesAofAquestionAcons
tructionAhelpAeliminateAambiguity,AarguableAanswers,Aguesswork,A andAunconsciousAcuesAtoAte
st-
savvyAstudents,AresultingAinAaAtestAthatAaccuratelyAreflectsAstudentA understanding.ATheATestAB
ankAoffersAoverA3510Aquestions,AincludingAaboutA2822AmultipleA choice,AaboutA362Atrue/false,A
aboutA162Aproblems,AandAaboutA164AshortAanswerAquestions.
InAadditionAtoAprovidingAaAvarietyAofAquestionsArelatedAtoAeachAchapterAobjective,AthisAtestAbank
A alsoAemploysAaAseriesAofAtagsAthatAcanAhelpAdesignAeffective,AbalancedAtestsAbyAtheAmeasureAof
4
Test Bank A
to accompany
A
TestABankApreparedAby
A ConstantinAColonescu
MacEwanAUniversity
A
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
A A A A A A A A
Sixth Canadian Edition
A A
ByAN.AGregoryAMankiwA/ARonaldAD.AKneeboneA/AKennethAJ.AMcKenzie
TestABankApreparedAbyAConstantinAColonescu,AMacEwanAUniversity
NETAAcopyAeditor:AFrancesARobinson
AvailableAonAInstructor’sAResourceACDAISBNA.A0-17-655440-8
COPYRIGHTA©2014AbyANelsonAEducationALtd.ANelsonAisAaAregisteredAtrademarkAusedAhereinAunderAlicence.AAllA ri
ghtsAreserved.
ForAmoreAinformationAcontactANelson,A1120ABirchmountARoad,AToronto,AOntarioA M1KA5G4.AOrAyouAcanAvisitAour
A InternetAsiteAatAwww.nelson.com.
ALLARIGHTSARESERVED.ANoApartAofAthisAworkAcoveredAbyAtheAcopyrightAhereonAmayAbeAreproducedAorAusedAinA a
nyAformAorAbyAanyAmeans—
graphic,Aelectronic,AorAmechanical,AincludingAphotocopying,Arecording,Ataping,AwebA distributionAorAinformationA
storageAandAretrievalAsystems—withoutAtheAwrittenApermissionAofAtheApublisher
ii
, TABLE OF CONTENTS
A A
PartA1AIntroduction
ChapterA1ATenAPrinciplesAofAEconomics 1-1
ChapterA2AThinkingALikeAanAEconomist 2-1
ChapterA3AInterdependenceAandAtheAGainsAfromATrade 3-1
PartA2ASupplyAAndADemand:AHowAMarketsAWork
ChapterA4ATheAMarketAForcesAofASupplyAandADemand 4-1
PartA3ATheADataAofAMacroeconomics
ChapterA5AMeasuringAaANation’sAIncome 5-1
ChapterA6AMeasuringAtheACostAofALiving 6-1
PartA4ATheARealAEconomyAinAtheALongARun
ChapterA7AProductionAandAGrowth 7-1
ChapterA8ASaving,AInvestment,AandAtheAFinancialASystem 8-1
ChapterA9AUnemploymentAandAItsANaturalARate 9-1
PartA5AMoneyAAndAPricesAinAtheALongARun
ChapterA10ATheAMonetaryASystem 10-1
ChapterA11AMoneyAGrowthAandAInflation 11-1
PartA6ATheAMacroeconomicsAofAOpenAEconomies
ChapterA12AOpen-EconomyAMacroeconomics:ABasicAConcepts 12-1
ChapterA13AAAMacroeconomicATheoryAofAtheASmallAOpenAEconomy 13-1
PartA7AShort-RunAEconomicAFluctuations
ChapterA14AAggregateADemandAandAAggregateASupply 14-1
ChapterA15ATheAInfluenceAofAMonetaryAandAFiscalAPolicyAonAAggregateADemand 15-1
ChapterA16ATheAShort-RunATradeoffAbetweenAInflationAandAUnemployment 16-1
PartA8AFinalAThoughts
ChapterA17AFiveADebatesAoverAMacroeconomicAPolicy 17-1
iii
, PREFACE
InAmostApost-
secondaryAcourses,AaAlargeApercentageAofAstudentAassessmentAisAbasedAonAmultiple-
A choiceAtesting.AManyAinstructorsAuseAmultiple-
choiceAreluctantly,AbelievingAthatAitAisAaA methodologyAbestAusedAforAtestingAwhatAaAstudentArem
embersAratherAthanAwhatAsheAorAheAhasA learned.
NelsonAEducationALtd.AunderstandsAthatAaAgoodAqualityAmultiple-
choiceAtestAbankAcanAprovideA theAmeansAtoAmeasureAhigher-
levelAthinkingAskillsAasAwellAasArecall.ARecognizingAtheA importanceAofAmultiple-
choiceAtestingAinAtoday’sAclassroom,AweAhaveAcreatedANETA—
theA NelsonAEducationATeachingAAdvantageAprogram—
toAensureAtheAvalueAofAourAhighAqualityAtestA banks.
TheANETAAprogramAwasAcreatedAinApartnershipAwithADavidADiBattista,AaA3MANationalATeachingA
Fellow,AprofessorAofApsychologyAatABrockAUniversity,AandAresearcherAinAtheAareaAofAmultiple-
A choiceAtesting.ANETAAensuresAthatAsubject-
matterAexpertsAwhoAauthorAtestAbanksAhaveAhadA trainingAinAtwoAareas:AavoidingAcommonAerror
sAinAtestAconstruction,AandAdevelopingAmultiple-
A choiceAtestAquestionsAthatA“getAbeyondAremembering”AtoAassessAhigher-levelAthinking.
AllANETAAtestAbanksAincludeADavidADiBattista’sAguideAforAinstructors,A“MultipleAChoiceATests:A
GettingABeyondARemembering.”AThisAguideAhasAbeenAdesignedAtoAassistAyouAinAusingANelsonA t
estAbanksAtoAachieveAyourAdesiredAoutcomesAinAyourAcourse.
TheATestABankAforAPrinciplesAofAMacroeconomics,ASixthACanadianAEditionAhasAbeenArevisedAfor
A CanadianAstudentsAbyAConstantinAColonescu,AMacEwanAUniversity.ATheAmultiple-
choiceA questionsAwereAwrittenAandAeditedAtoAconformAtoANETAAguidelines,AwhichAemphasizeA
theA developmentAofAhigher-
orderAthinkingAandAtheAeffectiveAconstructionAofAquestions.ANETAA principlesAofAquestionAcons
tructionAhelpAeliminateAambiguity,AarguableAanswers,Aguesswork,A andAunconsciousAcuesAtoAte
st-
savvyAstudents,AresultingAinAaAtestAthatAaccuratelyAreflectsAstudentA understanding.ATheATestAB
ankAoffersAoverA3510Aquestions,AincludingAaboutA2822AmultipleA choice,AaboutA362Atrue/false,A
aboutA162Aproblems,AandAaboutA164AshortAanswerAquestions.
InAadditionAtoAprovidingAaAvarietyAofAquestionsArelatedAtoAeachAchapterAobjective,AthisAtestAbank
A alsoAemploysAaAseriesAofAtagsAthatAcanAhelpAdesignAeffective,AbalancedAtestsAbyAtheAmeasureAof
4
