Which of the following is FALSE about credit unions?

	a.	It is excempt from federal income tax
	b.	Are member-owned financial cooperatives
	c.	Are non-profit
	d.	Provide full services to members including interest-bearing checking accounts and short-term loans
	e.	Its original purpose was to promote home ownership

Which of the following is FALSE about barter?

	a.	One of its drawbacks is that it was difficult to carry around
	b.	Refers to the exchange of goods/services for others
	c.	Had as a disadvantage the lack of common measures
	d.	One of its disadvantages was the lack of divisibility
	e.	It is an old practice that dates back to the beginning of the Industrial Revolution (circa 1760)

Answer 1 - e. Its original purpose was to promote home ownership.

Reason - Credit unions are the non-profit organization that are primarily owned and managed by its members. The members deposit their money into it and all the profits made by the credit union is distributed among the members in the form of more favourable interest rates.

Credit unions are exempt from the corporate income tax under the federal laws.

Credit unions are majorly focussed on encouraging its members to save money. It also offers loans to its members. It promotes the well being of its members.

The main purpose is not to promote the homeownership but to promote savings and well-being among members.

So, all other statements except E. Is true about Credit Unions.

Answer 2- a.One of its drawbacks is that it was difficult to carry around.

Reason - The traditional barter system was the first exchange system introduced back in the beginning of the Industrial Revolution (circa 1760). It was an old practise which involves the exchange of goods for others. No money was involved and only goods were exchanged for another goods. It was a simple practise used to happen without any difficulty.

For eg, one person needs 2 kg wheat and another person needs 2kg whole wheat flour, then they can exchange wheat and flour in relation to each other. No monetary transaction occurs and people satisfy their needs by bartering goods between them.

The barter system has a disadvantage of lack of divisibility. In this practise, all goods can't be divided or subdivided and there may be chances of big indivisible product being exchanged for a smaller product. All the goods can't be divided and exchanged on a common base and also it is difficult to transfer the complete value of good.

The barter system lacks the presence of a common unit in which the value of goods can be measured. Different goods can't be measured on a common basis which may lead to chances of one party suffering the disadvantage.