NETAASSESSMENT
Test Bank
To accompany
TestKBankKpreparedKby
K ConstantinKColonescuK
MacEwanKUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
Sixth Canadian Edition
ByKN.KGregoryKMankiwK/KRonaldKD.KKneeboneK/KKennethKJ.KMcKenzie
TestKBankKpreparedKbyKConstantinKColonescu,KMacEwanKUniversity
NETAKcopyKeditor:KFrancesKRobinson
AvailableKonKInstructor’sKResourceKCDKISBNK.K0-17-655440-8
COPYRIGHTK©2014KbyKNelsonKEducationKLtd.KNelsonKisKaKregisteredKtrademarkKusedKhereinKunderKlicence.KAllK rig
htsKreserved.
ForKmoreKinformationKcontactKNelson,K1120KBirchmountKRoad,KToronto,KOntarioK M1KK5G4.KOrKyouKcanKvisitKourK
InternetKsiteKatKwww.nelson.com.
ALLKRIGHTSKRESERVED.KNoKpartKofKthisKworkKcoveredKbyKtheKcopyrightKhereonKmayKbeKreproducedKorKusedKinK an
yKformKorKbyKanyKmeans—
graphic,Kelectronic,KorKmechanical,KincludingKphotocopying,Krecording,Ktaping,KwebK distributionKorKinformationKst
orageKandKretrievalKsystems—withoutKtheKwrittenKpermissionKofKtheKpublisher
ii
, TABLE OF CONTENTS
K K
PartK1KIntroduction
ChapterK1KTenKPrinciplesKofKEconomics 1-1
ChapterK2KThinkingKLikeKanKEconomist 2-1
ChapterK3KInterdependenceKandKtheKGainsKfromKTrade 3-1
PartK2KSupplyKAndKDemand:KHowKMarketsKWork
ChapterK4KTheKMarketKForcesKofKSupplyKandKDemand 4-1
PartK3KTheKDataKofKMacroeconomics
ChapterK5KMeasuringKaKNation’sKIncome 5-1
ChapterK6KMeasuringKtheKCostKofKLiving 6-1
PartK4KTheKRealKEconomyKinKtheKLongKRun
ChapterK7KProductionKandKGrowth 7-1
ChapterK8KSaving,KInvestment,KandKtheKFinancialKSystem 8-1
ChapterK9KUnemploymentKandKItsKNaturalKRate 9-1
PartK5KMoneyKAndKPricesKinKtheKLongKRun
ChapterK10KTheKMonetaryKSystem 10-1
ChapterK11KMoneyKGrowthKandKInflation 11-1
PartK6KTheKMacroeconomicsKofKOpenKEconomies
ChapterK12KOpen-EconomyKMacroeconomics:KBasicKConcepts 12-1
ChapterK13KAKMacroeconomicKTheoryKofKtheKSmallKOpenKEconomy 13-1
PartK7KShort-RunKEconomicKFluctuations
ChapterK14KAggregateKDemandKandKAggregateKSupply 14-1
ChapterK15KTheKInfluenceKofKMonetaryKandKFiscalKPolicyKonKAggregateKDemand 15-1
ChapterK16KTheKShort-RunKTradeoffKbetweenKInflationKandKUnemployment 16-1
PartK8KFinalKThoughts
ChapterK17KFiveKDebatesKoverKMacroeconomicKPolicy 17-1
iii
, PREFACE
InKmostKpost-
secondaryKcourses,KaKlargeKpercentageKofKstudentKassessmentKisKbasedKonKmultiple-
K choiceKtesting.KManyKinstructorsKuseKmultiple-
choiceKreluctantly,KbelievingKthatKitKisKaK methodologyKbestKusedKforKtestingKwhatKaKstudentKrem
embersKratherKthanKwhatKsheKorKheKhasK learned.
NelsonKEducationKLtd.KunderstandsKthatKaKgoodKqualityKmultiple-
choiceKtestKbankKcanKprovideK theKmeansKtoKmeasureKhigher-
levelKthinkingKskillsKasKwellKasKrecall.KRecognizingKtheK importanceKofKmultiple-
choiceKtestingKinKtoday’sKclassroom,KweKhaveKcreatedKNETA—
theK NelsonKEducationKTeachingKAdvantageKprogram—
toKensureKtheKvalueKofKourKhighKqualityKtestK banks.
TheKNETAKprogramKwasKcreatedKinKpartnershipKwithKDavidKDiBattista,KaK3MKNationalKTeachingK F
ellow,KprofessorKofKpsychologyKatKBrockKUniversity,KandKresearcherKinKtheKareaKofKmultiple-
K choiceKtesting.KNETAKensuresKthatKsubject-
matterKexpertsKwhoKauthorKtestKbanksKhaveKhadK trainingKinKtwoKareas:KavoidingKcommonKerrors
KinKtestKconstruction,KandKdevelopingKmultiple-
K choiceKtestKquestionsKthatK“getKbeyondKremembering”KtoKassessKhigher-levelKthinking.
AllKNETAKtestKbanksKincludeKDavidKDiBattista’sKguideKforKinstructors,K“MultipleKChoiceKTests:K G
ettingKBeyondKRemembering.”KThisKguideKhasKbeenKdesignedKtoKassistKyouKinKusingKNelsonK tes
tKbanksKtoKachieveKyourKdesiredKoutcomesKinK yourKcourse.
TheKTestKBankKforKPrinciplesKofKMacroeconomics,KSixthKCanadianKEditionKhasKbeenKrevisedKforK
CanadianKstudentsKbyKConstantinKColonescu,KMacEwanKUniversity.KTheKmultiple-
choiceK questionsKwereKwrittenKandKeditedKtoKconformKtoKNETAKguidelines,KwhichKemphasizeKt
heK developmentKofKhigher-
orderKthinkingKandKtheKeffectiveKconstructionKofKquestions.KNETAK principlesKofKquestionKconst
ructionKhelpKeliminateKambiguity,KarguableKanswers,Kguesswork,K andKunconsciousKcuesKtoKtes
t-
savvyKstudents,KresultingKinKaKtestKthatKaccuratelyKreflectsKstudentK understanding.KTheKTestKBa
nkKoffersKoverK3510Kquestions,KincludingKaboutK2822KmultipleK choice,KaboutK362Ktrue/false,Kab
outK162Kproblems,KandKaboutK164KshortKanswerKquestions.
InKadditionKtoKprovidingKaKvarietyKofKquestionsKrelatedKtoKeachKchapterKobjective,KthisKtestKbankK
alsoKemploysKaKseriesKofKtagsKthatKcanKhelpKdesignKeffective,KbalancedKtestsKbyKtheKmeasureKofK c
4
Test Bank
To accompany
TestKBankKpreparedKby
K ConstantinKColonescuK
MacEwanKUniversity
,NETA Assessment: Test Bank to accompany Principles of Macroeconomics,
Sixth Canadian Edition
ByKN.KGregoryKMankiwK/KRonaldKD.KKneeboneK/KKennethKJ.KMcKenzie
TestKBankKpreparedKbyKConstantinKColonescu,KMacEwanKUniversity
NETAKcopyKeditor:KFrancesKRobinson
AvailableKonKInstructor’sKResourceKCDKISBNK.K0-17-655440-8
COPYRIGHTK©2014KbyKNelsonKEducationKLtd.KNelsonKisKaKregisteredKtrademarkKusedKhereinKunderKlicence.KAllK rig
htsKreserved.
ForKmoreKinformationKcontactKNelson,K1120KBirchmountKRoad,KToronto,KOntarioK M1KK5G4.KOrKyouKcanKvisitKourK
InternetKsiteKatKwww.nelson.com.
ALLKRIGHTSKRESERVED.KNoKpartKofKthisKworkKcoveredKbyKtheKcopyrightKhereonKmayKbeKreproducedKorKusedKinK an
yKformKorKbyKanyKmeans—
graphic,Kelectronic,KorKmechanical,KincludingKphotocopying,Krecording,Ktaping,KwebK distributionKorKinformationKst
orageKandKretrievalKsystems—withoutKtheKwrittenKpermissionKofKtheKpublisher
ii
, TABLE OF CONTENTS
K K
PartK1KIntroduction
ChapterK1KTenKPrinciplesKofKEconomics 1-1
ChapterK2KThinkingKLikeKanKEconomist 2-1
ChapterK3KInterdependenceKandKtheKGainsKfromKTrade 3-1
PartK2KSupplyKAndKDemand:KHowKMarketsKWork
ChapterK4KTheKMarketKForcesKofKSupplyKandKDemand 4-1
PartK3KTheKDataKofKMacroeconomics
ChapterK5KMeasuringKaKNation’sKIncome 5-1
ChapterK6KMeasuringKtheKCostKofKLiving 6-1
PartK4KTheKRealKEconomyKinKtheKLongKRun
ChapterK7KProductionKandKGrowth 7-1
ChapterK8KSaving,KInvestment,KandKtheKFinancialKSystem 8-1
ChapterK9KUnemploymentKandKItsKNaturalKRate 9-1
PartK5KMoneyKAndKPricesKinKtheKLongKRun
ChapterK10KTheKMonetaryKSystem 10-1
ChapterK11KMoneyKGrowthKandKInflation 11-1
PartK6KTheKMacroeconomicsKofKOpenKEconomies
ChapterK12KOpen-EconomyKMacroeconomics:KBasicKConcepts 12-1
ChapterK13KAKMacroeconomicKTheoryKofKtheKSmallKOpenKEconomy 13-1
PartK7KShort-RunKEconomicKFluctuations
ChapterK14KAggregateKDemandKandKAggregateKSupply 14-1
ChapterK15KTheKInfluenceKofKMonetaryKandKFiscalKPolicyKonKAggregateKDemand 15-1
ChapterK16KTheKShort-RunKTradeoffKbetweenKInflationKandKUnemployment 16-1
PartK8KFinalKThoughts
ChapterK17KFiveKDebatesKoverKMacroeconomicKPolicy 17-1
iii
, PREFACE
InKmostKpost-
secondaryKcourses,KaKlargeKpercentageKofKstudentKassessmentKisKbasedKonKmultiple-
K choiceKtesting.KManyKinstructorsKuseKmultiple-
choiceKreluctantly,KbelievingKthatKitKisKaK methodologyKbestKusedKforKtestingKwhatKaKstudentKrem
embersKratherKthanKwhatKsheKorKheKhasK learned.
NelsonKEducationKLtd.KunderstandsKthatKaKgoodKqualityKmultiple-
choiceKtestKbankKcanKprovideK theKmeansKtoKmeasureKhigher-
levelKthinkingKskillsKasKwellKasKrecall.KRecognizingKtheK importanceKofKmultiple-
choiceKtestingKinKtoday’sKclassroom,KweKhaveKcreatedKNETA—
theK NelsonKEducationKTeachingKAdvantageKprogram—
toKensureKtheKvalueKofKourKhighKqualityKtestK banks.
TheKNETAKprogramKwasKcreatedKinKpartnershipKwithKDavidKDiBattista,KaK3MKNationalKTeachingK F
ellow,KprofessorKofKpsychologyKatKBrockKUniversity,KandKresearcherKinKtheKareaKofKmultiple-
K choiceKtesting.KNETAKensuresKthatKsubject-
matterKexpertsKwhoKauthorKtestKbanksKhaveKhadK trainingKinKtwoKareas:KavoidingKcommonKerrors
KinKtestKconstruction,KandKdevelopingKmultiple-
K choiceKtestKquestionsKthatK“getKbeyondKremembering”KtoKassessKhigher-levelKthinking.
AllKNETAKtestKbanksKincludeKDavidKDiBattista’sKguideKforKinstructors,K“MultipleKChoiceKTests:K G
ettingKBeyondKRemembering.”KThisKguideKhasKbeenKdesignedKtoKassistKyouKinKusingKNelsonK tes
tKbanksKtoKachieveKyourKdesiredKoutcomesKinK yourKcourse.
TheKTestKBankKforKPrinciplesKofKMacroeconomics,KSixthKCanadianKEditionKhasKbeenKrevisedKforK
CanadianKstudentsKbyKConstantinKColonescu,KMacEwanKUniversity.KTheKmultiple-
choiceK questionsKwereKwrittenKandKeditedKtoKconformKtoKNETAKguidelines,KwhichKemphasizeKt
heK developmentKofKhigher-
orderKthinkingKandKtheKeffectiveKconstructionKofKquestions.KNETAK principlesKofKquestionKconst
ructionKhelpKeliminateKambiguity,KarguableKanswers,Kguesswork,K andKunconsciousKcuesKtoKtes
t-
savvyKstudents,KresultingKinKaKtestKthatKaccuratelyKreflectsKstudentK understanding.KTheKTestKBa
nkKoffersKoverK3510Kquestions,KincludingKaboutK2822KmultipleK choice,KaboutK362Ktrue/false,Kab
outK162Kproblems,KandKaboutK164KshortKanswerKquestions.
InKadditionKtoKprovidingKaKvarietyKofKquestionsKrelatedKtoKeachKchapterKobjective,KthisKtestKbankK
alsoKemploysKaKseriesKofKtagsKthatKcanKhelpKdesignKeffective,KbalancedKtestsKbyKtheKmeasureKofK c
4
