NETAASSESSMENT
C
Test Bank C
to accompany
C
TestCBankCpreparedCby
C ConstantinCColonescuC
MacEwanCUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
C C C C C C C C
Sixth Canadian Edition
C C
ByCN.CGregoryCMankiwC/CRonaldCD.CKneeboneC/CKennethCJ.CMcKenzie
TestCBankCpreparedCbyCConstantinCColonescu,CMacEwanCUniversity
NETACcopyCeditor:CFrancesCRobinson
AvailableConCInstructor’sCResourceCCDCISBNC.C0-17-655440-8
COPYRIGHTC©2014CbyCNelsonCEducationCLtd.CNelsonCisCaCregisteredCtrademarkCusedChereinCunderClicence.CAllC rig
htsCreserved.
ForCmoreCinformationCcontactCNelson,C1120CBirchmountCRoad,CToronto,COntarioC M1KC5G4.COrCyouCcanCvisitCourC
InternetCsiteCatCwww.nelson.com.
ALLCRIGHTSCRESERVED.CNoCpartCofCthisCworkCcoveredCbyCtheCcopyrightChereonCmayCbeCreproducedCorCusedCinC an
yCformCorCbyCanyCmeans—
graphic,Celectronic,CorCmechanical,CincludingCphotocopying,Crecording,Ctaping,CwebC distributionCorCinformationCs
torageCandCretrievalCsystems—withoutCtheCwrittenCpermissionCofCtheCpublisher
ii
, TABLE OF CONTENTS
C C
PartC1CIntroduction
ChapterC1CTenCPrinciplesCofCEconomics 1-1
ChapterC2CThinkingCLikeCanCEconomist 2-1
ChapterC3CInterdependenceCandCtheCGainsCfromCTrade 3-1
PartC2CSupplyCAndCDemand:CHowCMarketsCWork
ChapterC4CTheCMarketCForcesCofCSupplyCandCDemand 4-1
PartC3CTheCDataCofCMacroeconomics
ChapterC5CMeasuringCaCNation’sCIncome 5-1
ChapterC6CMeasuringCtheCCostCofCLiving 6-1
PartC4CTheCRealCEconomyCinCtheCLongCRun
ChapterC7CProductionCandCGrowth 7-1
ChapterC8CSaving,CInvestment,CandCtheCFinancialCSystem 8-1
ChapterC9CUnemploymentCandCItsCNaturalCRate 9-1
PartC5CMoneyCAndCPricesCinCtheCLongCRun
ChapterC10CTheCMonetaryCSystem 10-1
ChapterC11CMoneyCGrowthCandCInflation 11-1
PartC6CTheCMacroeconomicsCofCOpenCEconomies
ChapterC12COpen-EconomyCMacroeconomics:CBasicCConcepts 12-1
ChapterC13CACMacroeconomicCTheoryCofCtheCSmallCOpenCEconomy 13-1
PartC7CShort-RunCEconomicCFluctuations
ChapterC14CAggregateCDemandCandCAggregateCSupply 14-1
ChapterC15CTheCInfluenceCofCMonetaryCandCFiscalCPolicyConCAggregateCDemand 15-1
ChapterC16CTheCShort-RunCTradeoffCbetweenCInflationCandCUnemployment 16-1
PartC8CFinalCThoughts
ChapterC17CFiveCDebatesCoverCMacroeconomicCPolicy 17-1
iii
, PREFACE
InCmostCpost-
secondaryCcourses,CaClargeCpercentageCofCstudentCassessmentCisCbasedConCmultiple-
C choiceCtesting.CManyCinstructorsCuseCmultiple-
choiceCreluctantly,CbelievingCthatCitCisCaC methodologyCbestCusedCforCtestingCwhatCaCstudentCrem
embersCratherCthanCwhatCsheCorCheChasC learned.
NelsonCEducationCLtd.CunderstandsCthatCaCgoodCqualityCmultiple-
choiceCtestCbankCcanCprovideC theCmeansCtoCmeasureChigher-
levelCthinkingCskillsCasCwellCasCrecall.CRecognizingCtheC importanceCofCmultiple-
choiceCtestingCinCtoday’sCclassroom,CweChaveCcreatedCNETA—
theC NelsonCEducationCTeachingCAdvantageCprogram—
toCensureCtheCvalueCofCourChighCqualityCtestC banks.
TheCNETACprogramCwasCcreatedCinCpartnershipCwithCDavidCDiBattista,CaC3MCNationalCTeachingC F
ellow,CprofessorCofCpsychologyCatCBrockCUniversity,CandCresearcherCinCtheCareaCofCmultiple-
C choiceCtesting.CNETACensuresCthatCsubject-
matterCexpertsCwhoCauthorCtestCbanksChaveChadC trainingCinCtwoCareas:CavoidingCcommonCerror
sCinCtestCconstruction,CandCdevelopingCmultiple-
C choiceCtestCquestionsCthatC“getCbeyondCremembering”CtoCassessChigher-levelCthinking.
AllCNETACtestCbanksCincludeCDavidCDiBattista’sCguideCforCinstructors,C“MultipleCChoiceCTests:C G
ettingCBeyondCRemembering.”CThisCguideChasCbeenCdesignedCtoCassistCyouCinCusingCNelsonC tes
tCbanksCtoCachieveCyourCdesiredCoutcomesCinCyourCcourse.
TheCTestCBankCforCPrinciplesCofCMacroeconomics,CSixthCCanadianCEditionChasCbeenCrevisedCforC
CanadianCstudentsCbyCConstantinCColonescu,CMacEwanCUniversity.CTheCmultiple-
choiceC questionsCwereCwrittenCandCeditedCtoCconformCtoCNETACguidelines,CwhichCemphasizeCt
heC developmentCofChigher-
orderCthinkingCandCtheCeffectiveCconstructionCofCquestions.CNETAC principlesCofCquestionCconst
ructionChelpCeliminateCambiguity,CarguableCanswers,Cguesswork,C andCunconsciousCcuesCtoCtes
t-
savvyCstudents,CresultingCinCaCtestCthatCaccuratelyCreflectsCstudentC understanding.CTheCTestCBa
nkCoffersCoverC3510Cquestions,CincludingCaboutC2822CmultipleC choice,CaboutC362Ctrue/false,Ca
boutC162Cproblems,CandCaboutC164CshortCanswerCquestions.
InCadditionCtoCprovidingCaCvarietyCofCquestionsCrelatedCtoCeachCchapterCobjective,CthisCtestCbank
C alsoCemploysCaCseriesCofCtagsCthatCcanChelpCdesignCeffective,CbalancedCtestsCbyCtheCmeasureCof
4
C
Test Bank C
to accompany
C
TestCBankCpreparedCby
C ConstantinCColonescuC
MacEwanCUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
C C C C C C C C
Sixth Canadian Edition
C C
ByCN.CGregoryCMankiwC/CRonaldCD.CKneeboneC/CKennethCJ.CMcKenzie
TestCBankCpreparedCbyCConstantinCColonescu,CMacEwanCUniversity
NETACcopyCeditor:CFrancesCRobinson
AvailableConCInstructor’sCResourceCCDCISBNC.C0-17-655440-8
COPYRIGHTC©2014CbyCNelsonCEducationCLtd.CNelsonCisCaCregisteredCtrademarkCusedChereinCunderClicence.CAllC rig
htsCreserved.
ForCmoreCinformationCcontactCNelson,C1120CBirchmountCRoad,CToronto,COntarioC M1KC5G4.COrCyouCcanCvisitCourC
InternetCsiteCatCwww.nelson.com.
ALLCRIGHTSCRESERVED.CNoCpartCofCthisCworkCcoveredCbyCtheCcopyrightChereonCmayCbeCreproducedCorCusedCinC an
yCformCorCbyCanyCmeans—
graphic,Celectronic,CorCmechanical,CincludingCphotocopying,Crecording,Ctaping,CwebC distributionCorCinformationCs
torageCandCretrievalCsystems—withoutCtheCwrittenCpermissionCofCtheCpublisher
ii
, TABLE OF CONTENTS
C C
PartC1CIntroduction
ChapterC1CTenCPrinciplesCofCEconomics 1-1
ChapterC2CThinkingCLikeCanCEconomist 2-1
ChapterC3CInterdependenceCandCtheCGainsCfromCTrade 3-1
PartC2CSupplyCAndCDemand:CHowCMarketsCWork
ChapterC4CTheCMarketCForcesCofCSupplyCandCDemand 4-1
PartC3CTheCDataCofCMacroeconomics
ChapterC5CMeasuringCaCNation’sCIncome 5-1
ChapterC6CMeasuringCtheCCostCofCLiving 6-1
PartC4CTheCRealCEconomyCinCtheCLongCRun
ChapterC7CProductionCandCGrowth 7-1
ChapterC8CSaving,CInvestment,CandCtheCFinancialCSystem 8-1
ChapterC9CUnemploymentCandCItsCNaturalCRate 9-1
PartC5CMoneyCAndCPricesCinCtheCLongCRun
ChapterC10CTheCMonetaryCSystem 10-1
ChapterC11CMoneyCGrowthCandCInflation 11-1
PartC6CTheCMacroeconomicsCofCOpenCEconomies
ChapterC12COpen-EconomyCMacroeconomics:CBasicCConcepts 12-1
ChapterC13CACMacroeconomicCTheoryCofCtheCSmallCOpenCEconomy 13-1
PartC7CShort-RunCEconomicCFluctuations
ChapterC14CAggregateCDemandCandCAggregateCSupply 14-1
ChapterC15CTheCInfluenceCofCMonetaryCandCFiscalCPolicyConCAggregateCDemand 15-1
ChapterC16CTheCShort-RunCTradeoffCbetweenCInflationCandCUnemployment 16-1
PartC8CFinalCThoughts
ChapterC17CFiveCDebatesCoverCMacroeconomicCPolicy 17-1
iii
, PREFACE
InCmostCpost-
secondaryCcourses,CaClargeCpercentageCofCstudentCassessmentCisCbasedConCmultiple-
C choiceCtesting.CManyCinstructorsCuseCmultiple-
choiceCreluctantly,CbelievingCthatCitCisCaC methodologyCbestCusedCforCtestingCwhatCaCstudentCrem
embersCratherCthanCwhatCsheCorCheChasC learned.
NelsonCEducationCLtd.CunderstandsCthatCaCgoodCqualityCmultiple-
choiceCtestCbankCcanCprovideC theCmeansCtoCmeasureChigher-
levelCthinkingCskillsCasCwellCasCrecall.CRecognizingCtheC importanceCofCmultiple-
choiceCtestingCinCtoday’sCclassroom,CweChaveCcreatedCNETA—
theC NelsonCEducationCTeachingCAdvantageCprogram—
toCensureCtheCvalueCofCourChighCqualityCtestC banks.
TheCNETACprogramCwasCcreatedCinCpartnershipCwithCDavidCDiBattista,CaC3MCNationalCTeachingC F
ellow,CprofessorCofCpsychologyCatCBrockCUniversity,CandCresearcherCinCtheCareaCofCmultiple-
C choiceCtesting.CNETACensuresCthatCsubject-
matterCexpertsCwhoCauthorCtestCbanksChaveChadC trainingCinCtwoCareas:CavoidingCcommonCerror
sCinCtestCconstruction,CandCdevelopingCmultiple-
C choiceCtestCquestionsCthatC“getCbeyondCremembering”CtoCassessChigher-levelCthinking.
AllCNETACtestCbanksCincludeCDavidCDiBattista’sCguideCforCinstructors,C“MultipleCChoiceCTests:C G
ettingCBeyondCRemembering.”CThisCguideChasCbeenCdesignedCtoCassistCyouCinCusingCNelsonC tes
tCbanksCtoCachieveCyourCdesiredCoutcomesCinCyourCcourse.
TheCTestCBankCforCPrinciplesCofCMacroeconomics,CSixthCCanadianCEditionChasCbeenCrevisedCforC
CanadianCstudentsCbyCConstantinCColonescu,CMacEwanCUniversity.CTheCmultiple-
choiceC questionsCwereCwrittenCandCeditedCtoCconformCtoCNETACguidelines,CwhichCemphasizeCt
heC developmentCofChigher-
orderCthinkingCandCtheCeffectiveCconstructionCofCquestions.CNETAC principlesCofCquestionCconst
ructionChelpCeliminateCambiguity,CarguableCanswers,Cguesswork,C andCunconsciousCcuesCtoCtes
t-
savvyCstudents,CresultingCinCaCtestCthatCaccuratelyCreflectsCstudentC understanding.CTheCTestCBa
nkCoffersCoverC3510Cquestions,CincludingCaboutC2822CmultipleC choice,CaboutC362Ctrue/false,Ca
boutC162Cproblems,CandCaboutC164CshortCanswerCquestions.
InCadditionCtoCprovidingCaCvarietyCofCquestionsCrelatedCtoCeachCchapterCobjective,CthisCtestCbank
C alsoCemploysCaCseriesCofCtagsCthatCcanChelpCdesignCeffective,CbalancedCtestsCbyCtheCmeasureCof
4
