Careful about the NO_ERRORS_SCHEMA. Let's quote another part of the same the docs:

Shallow component tests with NO_ERRORS_SCHEMA greatly simplify unit testing of complex templates. However, the compiler no longer alerts you to mistakes such as misspelled or misused components and directives.

I find that drawback quite contrary to the purposes of writing a test. Even more so that it's not that hard to mock a basic component.

An approach not yet mentioned here is simply to declare them at config time:

@Component({
  selector: 'product-settings',
  template: '<p>Mock Product Settings Component</p>'
})
class MockProductSettingsComponent {}

@Component({
  selector: 'product-editor',
  template: '<p>Mock Product Editor Component</p>'
})
class MockProductEditorComponent {}

...  // third one

beforeEach(() => {
  TestBed.configureTestingModule({
      declarations: [
        ProductSelectedComponent,
        MockProductSettingsComponent,
        MockProductEditorComponent,
        // ... third one
      ],
      providers: [/* your providers */]
  });
  // ... carry on
});

As requested, I'm posting another answer about how to mock sub components with input/output:

So Lets start by saying we have TaskListComponent that displays tasks, and refreshes whenever one of them is clicked:

<div id="task-list">
  <div *ngFor="let task of (tasks$ | async)">
    <app-task [task]="task" (click)="refresh()"></app-task>
  </div>
</div>

app-task is a sub component with the [task] input and the (click) output.

Ok great, now we want to write tests for my TaskListComponent and of course we don't want to test the real app-taskcomponent.

so as @Klas suggested we can configure our TestModule with:

schemas: [CUSTOM_ELEMENTS_SCHEMA]

We might not get any errors at either build or runtime, but we won't be able to test much other than the existence of the sub component.

So how can we mock sub components?

First we'll define a mock directive for our sub component (same selector):

@Directive({
  selector: 'app-task'
})
class MockTaskDirective {
  @Input('task')
  public task: ITask;
  @Output('click')
  public clickEmitter = new EventEmitter<void>();
}

Now we'll declare it in the testing module:

let fixture : ComponentFixture<TaskListComponent>;
let cmp : TaskListComponent;

beforeEach(() => {
  TestBed.configureTestingModule({
    declarations: [TaskListComponent, **MockTaskDirective**],
    // schemas: [CUSTOM_ELEMENTS_SCHEMA],
    providers: [
      {
        provide: TasksService,
        useClass: MockService
      }
    ]
  });

  fixture = TestBed.createComponent(TaskListComponent);
  **fixture.autoDetectChanges();**
  cmp = fixture.componentInstance;
});

• Notice that because the generation of sub component of the fixture is happening asynchronously after its creation, we activate its autoDetectChanges feature.

In our tests, we can now query for the directive, access its DebugElement's injector, and get our mock directive instance through it:

import { By } from '@angular/platform-browser';    
const mockTaskEl = fixture.debugElement.query(By.directive(MockTaskDirective));
const mockTaskCmp = mockTaskEl.injector.get(MockTaskDirective) as MockTaskDirective;

[This part should usually be in the beforeEach section, for cleaner code.]

From here, the tests are a piece of cake :)

it('should contain task component', ()=> {
  // Arrange.
  const mockTaskEl = fixture.debugElement.query(By.directive(MockTaskDirective));

  // Assert.
  expect(mockTaskEl).toBeTruthy();
});

it('should pass down task object', ()=>{
  // Arrange.
  const mockTaskEl = fixture.debugElement.query(By.directive(MockTaskDirective));
  const mockTaskCmp = mockTaskEl.injector.get(MockTaskDirective) as MockTaskDirective;

  // Assert.
  expect(mockTaskCmp.task).toBeTruthy();
  expect(mockTaskCmp.task.name).toBe('1');
});

it('should refresh when task is clicked', ()=> {
  // Arrange
  spyOn(cmp, 'refresh');
  const mockTaskEl = fixture.debugElement.query(By.directive(MockTaskDirective));
  const mockTaskCmp = mockTaskEl.injector.get(MockTaskDirective) as MockTaskDirective;

  // Act.
  mockTaskCmp.clickEmitter.emit();

  // Assert.
  expect(cmp.refresh).toHaveBeenCalled();
});