ate the double entry for each of the following transactions. (a) Purchase of a motor vehicle for Rs.3.5 million on credit basis. (b) Cash receipt from a customer for a credit sale of Rs.10,000/- after deducting a discount of Rs.2,000/-. (c) Capital introduced to the business by the owne r is Rs.100,000/

1. a) What are the advantages of using money in an exchange economy over the
barter system? [15marks]
b) Explain the neutrality of money concept. [5marks]
c) What are the consequences of increasing money supply in an economy that
has already attained full employment level. Use appropriate diagrams to support your answer. [10marks]
2. a) Distinguish between simple and complex money multipliers. [8marks]
b) Discuss any four instruments of money supply control. [12marks]

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