ECON 1103 - The multiple by which the chartered banking system

All are True/false questions:

• The multiple by which the chartered banking system can expand the supply of money on the basis of excess reserves is larger the smaller the desired reserve ratio.
• In a severe economic recession, monetary policy would likely be a better method of stimulating the economy than fiscal policy.
• Consider a world with only two countries, A and B, and only two goods X and Y. Then, if country A has a comparative advantage in good X, country A must also have an absolute advantage in good X.
• If the reserve ratio of the chartered banks is 10%, then an open market purchase of $1 million by the Bank of Canada permits the chartered banks to increase their deposit liabilities by a maximum of $10 million.
• Opportunity Cost and Comparative Advantage can be expressed in terms of each other
• One of the necessary FUNCTIONS of money is that it must be easily divisible.
• When the Bank of Canada sells securities to the chartered banks, it increases their earning assets, and thus makes possible an increase in the money supply.