IPod Touch 4th Gen - Install icon grayed out in iTunes

I bought a 4th gen iPod Touch for the kids for Christmas.  Its running iOS 6.1.5, I loaded it up w/ games for the kids a couple weeks ago with no problems but now when I buy new games through iTunes and try to transfer over via iTunes, the Install button is grayed out in iTunes.  The Remove button works just fine so I can take apps off the iPod but can't install any new ones.  I also don't have an App Store icon on the iPod Touch any more and I'm 99% sure it used to be there.  The apps that are installed still play but the kids are getting tired of the same ones and I obviously didn't pay the money for 2 weeks of use.  Any idea what's going on??

Sounds like the Restriction that prevents installing apps is set. Go to Settings>General>Restrictions and check/change. It is passcode protected.

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