Physical functions of marketing and utility creation:

• Statement (I) is true: Agricultural marketing functions are classified into physical functions (storage, transportation, processing), facilitating functions (grading, financing, risk-bearing), and exchange functions (buying and selling). Storage is a primary physical function.
• Statement (II) is true: Agricultural produce is seasonal in harvest but demanded throughout the year. Storage bridges the gap between harvest and consumption, thereby creating time utility.
• Both statements are true.

Monetary transmission mechanism:

• When the central bank contracts the money supply ($M_s \downarrow$), excess demand for money drives interest rates upward ($r \uparrow$).
• Higher interest rates increase the cost of borrowing capital for firms, causing planned capital investment projects to become less profitable (marginal efficiency of capital $\lt r$).
• Consequently, private business investment declines ($I \downarrow$).