1. What are the inherent disadvantages of a barter system?

2. Calculate M1 and M2 using details from the table given below.

	Value (in millions)
Currency	$75
Checkable deposits	25
Traveler's checks	10
Savings deposits	125
Small-denomination time deposits	75
money market mutual fund shares	50

3. List and describe the four functions of money.

4. , describe how banks can create money.

Interesting Video clip on how Banks creat money. It will help to answer one of the questions.

http://www.youtube.com/watch?v=sHqffKJT1ik