(Test Bank) Principles of Economics

Mankiw, 7

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Test Bank

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Test Bank for Principles of Economics, The downloadable file consists of 791 pages, and the total size of the file is 6.43 MB. Purchase now only for highly discounted price.

Author(s): Mankiw

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Principles of Macroeconomics ED.7 N. Gregory Mankiw Test bank 2021 NETA ASSESSMENT Test Bank to accompany Test Bank prepared by Constantin Colonescu MacEwan University ii NETA Assessment: Test Bank to accompany Principles of Macroeconomics , Sixth Canadian Edition By N. Gregory Mankiw / Ronald D. Kneebone / Kenneth J. McKenzie Test Bank prepared by Constantin Colonescu, MacEwan University NETA copy editor: Frances Robinson Available on Instructor’s Resource CD ISBN . 0-17-655440 -8 COPYRIGHT ©2014 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence. All rights reserved. For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario M1K 5G4. Or you can visit our Internet site at www.nelson.com. ALL RIGHTS RESERVED. No part of th is work covered by the copyright hereon may be reproduced or used in any form or by any means —graphic, electronic, or mechanical, including photocopying, recording, taping, web distribution or information storage and retrieval systems —without the written p ermission of the publisher iii TABLE OF CONTENTS Part 1 Introduction Chapter 1 Ten Principles of Economics 1-1 Chapter 2 Thinking Like an Economist 2-1 Chapter 3 Interdependence and the Gains from Trade 3-1 Part 2 Supply And Demand: How Markets Work Chapter 4 The Market Forces of Supply and Demand 4-1 Part 3 The Data of Macroeconomics Chapter 5 Measuring a Nation ’s Income 5-1 Chapter 6 Measuring the Cost of Livi ng 6-1 Part 4 The Real Economy in the Long Run Chapter 7 Production and Growth 7-1 Chapter 8 Saving, Investment, and the Financial System 8-1 Chapter 9 Unemp loyment and Its Natural Rate 9-1 Part 5 Money And Prices in the Long Run Chapter 10 The Mo netary Syste m 10-1 Chapter 11 Money Growth and Inflation 11-1 Part 6 The Macroeconomics of Open Economies Chapter 12 Open -Economy Macroeconomics: Basic Concepts 12-1 Chapter 13 A Macroeconomic Theory of the Small Open Economy 13-1 Part 7 Short-Run Economic Fluctuations Chapter 14 Aggregate Demand and Aggregate Supply 14-1 Chapter 15 The Influence of Monetary and Fiscal Policy on Aggregate Demand 15-1 Chapter 16 The Short -Run Tradeoff between Inflation and Unemploym ent 16-1 Part 8 Final Thoughts Chapter 17 Five Debates over Macroeconomic Policy 17-1 iv PREFACE In most post-secondary courses , a large percentage of student assessment is based on multiple - choice testing. Many instructors use multiple -choice reluctantly, believing that it is a methodology best used for testing what a student remembers rather than what she or he has learned . Nelson Education Ltd. understands that a good quality multiple -choice test bank can provide the means to measure higher -level thinking skills as well as recall . Recognizing the importance of multiple -choice testing in today’s classroom, we have created NETA —the Nelson Education Teaching Advantage program —to ensure the value of our high quality test banks. The NETA program was created in partnership with David DiBattista , a 3M National Teaching Fello w, professor of psychology at Brock University , and researcher in the area of multiple - choice testing . NETA ensures that subject -matter experts who author test banks have had training in two areas: avoiding common errors in test construction, and developing multiple - choice test questions that “get beyond remembering” to assess higher -level thinking. All NETA test banks include David DiBattista’s gu ide for instructors, “Multiple Choice Tests: Getting Beyond Remembering.” This guide has been designed to assist you in using Nelson test banks to achieve your desired outcomes in your course . The Test Bank for Principles of Macroeconomics , Sixth Canadian Edition has been revised for Canadian students by Constantin Colonescu, MacEwan University . The multiple -choice questions were written and edited to conform to NETA guidelines, which emphasize the development of higher -order thinking and the eff ective construction of questions. NETA principles of question construction help eliminate ambiguity, arguable answers, guesswork, and unconscious cues to test -savvy students, resulting in a test that accurately reflects student understanding. The Test Bank offers o ver 3510 questions , including about 2822 multiple choice, about 362 true/false, about 162 problems, and about 164 short answer questions. In addition to providing a variety of questions related to each chapter objective, this test bank also employs a series of tags tha t can help design effective, balanced tests by the measure of course outcomes. All of the tags are included with the question in the test bank. These tags include:  ANS: The correct answer. (Suggested an swers are provided for the short answer questions.)  PTS: T he number of points an instructor can assign for each question. The default is 1 point. v  BLM: The category from Bloom ’s taxonomy for learning (Remember or Higher Order). This category is included to assist instructors in assessing student’s higher -order cognitive skills .  DIF: The difficulty level of question in terms of Easy, Moderate, Challenging.  REF: The related page number in the text. The Computerized Test Bank All items from this Test Bank are also available in ExamView®, a computerized testing package with online capabilities. ExamView® helps you create, customize and deliver both print and online tests in minutes. Its “what you see is what you get” interface and easy -to-use test wizard guide you step -by-step through the test creation process. The ExamView® Test Bank files and software are included on the Instructor’s Resource CD in Windows PC and Macintosh platforms ISBN 0-17-655440 -8. Copyright © 2 014 Nelson Education Limited. 1-1 Chapter 1 —Ten Principles of Economics MULTIPLE CHOICE 1. Which word comes from the Greek word for “one who manages a household”? a. market b. consumer c. producer d. economy ANS: D PTS: 1 DIF: Easy REF: p. 3-4 BLM: Remember NOT: Macro TB_1 -1 2. From which Greek word(s) is the word economy derived? a. environment b. one who manages a household c. one who participates in a market d. conservation ANS: B PTS: 1 DIF: Easy REF: p. 3-4 BLM: Remember NOT: Macro TB_1 -2 3. What do households an d economies have in common? a. They both must allocate scarce resources. b. They both face many decisions. c. They both must allocate the goods and services they produce. d. They both must have a central decision maker. ANS: D PTS: 1 DIF: Average REF: p. 3-4 BLM: Remember NOT: Macro TB_1 -3 4. What concept does economics primarily deal with? a. scarcity b. poverty c. change d. power ANS: A PTS: 1 DIF: Easy REF: p. 4 BLM: Remember NOT: Macro TB_1 -4 5. Which of the following is NOT included in the decisions that every society must make? a. what goods will be produced b. who will produce the goods c. what determines consumer preferences d. who will consume the goods ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -5 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-2 6.Why do both households and societies face many decisions? a. because resources are scarce b. because populations may increase or decrease over time c. because wages for households and therefore society fluctuate with business cycles d. because peop le, by nature, tend to disagree ANS: A PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -6 7. When is a good considered scarce in a society? a. when more output of the good is possible b. when everyone in that society cannot have all they want of the good c. when the government restricts production of the good d. when only the richest people in the economy can buy all they want of the good ANS: B PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -7 8. When does scarcity e xist? a. when there is less than an infinite amount of a resource or good b. when society can meet the wants of every individual c. when there is less of a good or resource available than people wish to have d. when the government fails to produce goods ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -8 9. How are goods and services allocated in a market economy? a. by government decisions b. by giving each individual just enough for a decent standard of living c. by the action s of all firms and consumers d. by inherited rights and properties ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Higher Order NOT: Macro TB_1 -9 10. Approximately what percentage of the world’s economies experience scarcity? a. 25% b. 50% c. 75% d. 100% ANS: D PTS: 1 DIF: Easy REF: p. 4 BLM: Remember NOT: Macro TB_1 -10 11. What is the economy experiencing when a society cannot produce all the goods and services people wish to have? a. scarcity b. communism c. externalities d. market failure ANS: A PTS: 1 DIF: Easy REF: p. 4 BLM: Higher Order NOT: Macro TB_1 -11 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-3 12. For society, when is a good NOT scarce? a. if at least one individual in society can obtain all he or she wants of the good b. if firms are producing at full capacity c. if all members of society can have all they want of the good d. if those who have enough income can buy all they want of the good ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Higher Order NOT: Macro TB_1 -12 13. Which of the following goods best meets the definition of scarcity? a. air b. water in the ocean c. water in a city d. wood in a forest ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -13 14. What does economics study? a. business b. how society manages its scarce re sources c. central planning d. government regulation ANS: B PTS: 1 DIF: Easy REF: p. 4 BLM: Remember NOT: Macro TB_1 -14 15. What does economics study? a. how society manages its scarce resources b. the government’s role in society c. how to incre ase production d. how firms make profits ANS: A PTS: 1 DIF: Easy REF: p. 4 BLM: Remember NOT: Macro TB_1 -15 16. In most societies, who allocates resources? a. a single central planner b. those who own the resources c. those firms that use resource s to provide goods and services d. the combined actions of millions of households and firms ANS: D PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -16 17. What do economists study? a. how people make decisions b. how governments interact with one another c. the forces and trends that affect only the economy as a whole d. how societies change over time ANS: D PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -17 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-4 18. Which of the following is NOT a major area of study for e conomists? a. how people make decisions b. how countries choose national leaders c. how people interact with each other d. how forces and trends affect the overall economy ANS: B PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -18 19. What concept is illustrated by the adage, “There is no such thing as a free lunch”? a. tradeoffs b. scarcity c. productivity d. efficiency ANS: A PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -19 20. What does the adage “There is no su ch thing as a free lunch” mean? a. Even people on welfare have to pay for food. b. The cost of living is always increasing. c. To get something we like, we usually have to give up another thing we like. d. All costs are included in the price of a produc t. ANS: C PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -20 21. What do economists illustrate when they use the phrase “There is no such thing as a free lunch”? a. how inflation increases prices b. that to get one thing, we must give up something else c. that nothing is free in a market economy d. that if something looks too good to be true, it probably is ANS: B PTS: 1 DIF: Average REF: p. 4 BLM: Remember NOT: Macro TB_1 -21 22. Which best represents the concept represented by th e adage “There is no such thing as a free lunch”? a. Melissa can only attend the concert if she takes her sister with her. b. Greg is hungry and homeless. c. Brian must repair the tire on his bike before he can ride it to class. d. Kendra must decide be tween going to Miami or Cancun for spring break. ANS: D PTS: 1 DIF: Challenging REF: p. 4 BLM: Remember NOT: Macro TB_1 -22 23. Guns and butter represent the classic societal tradeoff between spending on which two items? a. durable and nondurable good s b. imports and exports c. national defence and consumer goods d. law enforcement and agriculture ANS: C PTS: 1 DIF: Average REF: p. 4-5 BLM: Remember NOT: Macro TB_1 -23 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-5 24. Henry decides to spend two hours playing golf rather than working at his job, which pays $8 per hour. What is Henry’s tradeoff? a. the $16 he could have earned working for two hours b. nothing, because he enjoys playing golf more than working c. the increase in skill he obtains from playing golf for those two hours d. nothi ng, because he spent $16 for green fees to play golf ANS: A PTS: 1 DIF: Average REF: p. 4-5 BLM: Higher Order NOT: Macro TB_1 -24 25. When society requires that firms reduce pollution, what happens? a. There is a tradeoff because of reduced incomes to the firms' owners, workers, and customers. b. There is no tradeoff, since everyone benefits from reduced pollution. c. There is no tradeoff for society as a whole, since the cost of reducing pollution falls only on the firms affected by the requiremen ts. d. There is a tradeoff only if some firms are forced to close. ANS: A PTS: 1 DIF: Challenging REF: p. 4-5 BLM: Higher Order NOT: Macro TB_1 -25 26. Daniel decides to spend the last two hours of the night before his economics exam studying inste ad of sleeping. For Daniel, what would his tradeoff be? a. nothing, since no dollar value can be put on sleep b. nothing, since studying would be more beneficial than sleep c. the six hours of sleep he could have had if he had gone to bed before midnight d. the two hours of rest he would have gotten ANS: D PTS: 1 DIF: Average REF: p. 4-5 BLM: Higher Order NOT: Macro TB_1 -26 27. How does a tradeoff exist between a clean environment and a higher level of income? a. Studies show that individuals wit h higher levels of income actually pollute less than low-income individuals. b. To pay for pollution cleanup, the government must increase taxes, which lowers income. c. Laws that reduce pollution raise costs of production and reduce incomes. d. By empl oying individuals to clean up pollution, employment and income both rise. ANS: C PTS: 1 DIF: Challenging REF: p. 4-5 BLM: Higher Order NOT: Macro TB_1 -27 28. Which of the following would NOT be a result of laws that require firms to reduce pollutio n? a. lower spending by government b. higher prices to consumers c. lower wages to workers d. smaller profit to firms ANS: A PTS: 1 DIF: Average REF: p. 4-5 BLM: Remember NOT: Macro TB_1 -28 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-6 29. What will pollution regulations do? a. increase profi t to firms b. impose a tradeoff on society c. allow firms to raise workers’ wages d. lower prices for consumers ANS: B PTS: 1 DIF: Average REF: p. 4-5 BLM: Remember NOT: Macro TB_1 -29 30. Which of the following best defines efficiency? a. absolute fairness b. equal distribution c. minimum waste d. consumer sovereignty ANS: C PTS: 1 DIF: Easy REF: p. 5 BLM: Remember NOT: Macro TB_1 -30 31. What does efficiency mean? a. Society is conserving resources in order to save them for the future. b. Society’s goods and services are distributed fairly among society’s members. c. Society has lessened its dependence on foreign energy sources. d. Society is getting the most it can from its scarce resources. ANS: D PTS: 1 DIF: Average REF: p. 5 BLM: Remember NOT: Macro TB_1 -31 32. In which of the following situations would economists use the word equity? a. Each member of society has the same income. b. Society is getting the most it can from its scarce resources. c. Those in society who have the least will receive the most. d. The benefits of society’s resources are distributed fairly among society’s members. ANS: D PTS: 1 DIF: Average REF: p. 5 BLM: Remember NOT: Macro TB_1 -32 33. What is one definition of equity? a. equality b. efficien cy c. fairness d. similarity ANS: C PTS: 1 DIF: Easy REF: p. 5 BLM: Remember NOT: Macro TB_1 -33 34. What happens when government policies are being designed? a. There is usually a tradeoff between equity and efficiency. b. Equity and efficiency go als are usually independent of each other. c. Equity can usually be achieved without an efficiency loss. d. Increasing efficiency usually results in more equity. ANS: A PTS: 1 DIF: Average REF: p. 5 BLM: Remember NOT: Macro TB_1 -34 Test Bank Chapter 1 Macro economics Mankiw 6Ce Copyright © 2 014 Nelson Education Limited. 1-7 35. When governm ent policies such as the welfare system try to help the neediest members of society, what happens? a. It increases equity and reduces efficiency. b. It reduces charitable contributions in an economy. c. It increases the productivity of the needy in socie ty. d. It causes market failure to occur. ANS: A PTS: 1 DIF: Average REF: p. 5 BLM: Higher Order NOT: Macro TB_1 -35 36. When the government implements programs such as progressive income tax rates, which of the following is likely to occur? a. Equity and efficiency is increased. b. Equity and efficiency is decreased. c. Equity is decreased, and efficiency is increased. d. Equity is decreased, and efficiency is decreased. ANS: B PTS: 1 DIF: Average REF: p. 5 BLM: Higher Order NOT: Macro TB_1 -36 37. When the government attempts to cut the economic pie into more equal slices, what happens? a. It is easier to cut the pie, and therefore the economy can produce a larger pie. b. The government can more easily allocate the pie to those most in n eed. c. The pie gets smaller, and there will be less pie for everyone. d. The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone. ANS: C PTS: 1 DIF: Challenging REF: p. 5 BLM: Remember NOT: Macro T B_1-37 38. When the government attempts to improve equity in an economy, what is often the result? a. an increase in overall output in the economy b. additional government revenue since overall income will increase c. an actual reduction in equity d. reduced efficiency in the economy ANS: D PTS: 1 DIF: Average REF: p. 5 BLM: Remember NOT: Macro TB_1 -38 39. When the government redistributes income from the rich to the poor, what is the result? a. Efficiency is improved, but equity is not. b. Both rich people and poor people benefit directly. c. People work less and produce fewer goods and services. d. Rich people consume fewer goods, but poor people consume more goods, resulting in no real change. ANS: C PTS: 1 DIF: Average REF: p. 5 BLM: Remember NOT: Macro TB_1 -39