Question 4 1 pts What economic purpose(s) do banks serve in our economy? provide

Question

Question 4 1 pts What economic purpose(s) do banks serve in our economy? provide loans to households and firms for investment spending Provide immunity to the effects of inflation for savers determine the discount rate via forces of supply and demand buy and sell stocks Question 5 1 pts The "double coincidence of wants" implies that barter becomes more difficult when: many goods are produced and the economy is quite complex fewer goods are produced and the economy is fairly simple barter never is difficult Question 6 1 pts M1 is larger than M2 because M1 isn't bigger than M2. M2 is bigger than M1. M1 includes M2 M1 accounts for all currency (including electronic) while M2 only accounts for physical currency O M2 only includes savings accounts while M1 includes all liquid currencies, coins, and travelers checks.

Explanation / Answer

4. Ans : Provide loans to households and firms for investment spending.

5. Ans : Many goods are produced and the economy is quite complex.

Explanation :

The " double coincidence of wants " implies barter system where goods are exchaged against goods without use of money for exchange.So it is very difficult for both the buyers and sellers when many goods are produced and the economy is quite complex. It is because the disre to purchase and sell will not be carried out easily by barter system.

6. Ans : M1 isn't bigger than M2.M2 is bigger than M1.

Explanation :

M2 includes near- moneys where as M1 does not includes it. So M2 is greater than M1.

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