2. Primary fun MEDIUM OF EXCHANGE MEASURE OF VALUE

3. SECONDARY FUN. STANDARD OF DEFERRED PAYMENTS STORE OF VALUE TRANSFER OF VALUE

4. CONTINGENT FUN. BASIS OF CREDIT CREATION MAXIMUM SATISFACTION DISTRIBUTION OF NATIONAL INCOME BEARER OF OPTION GUARANTEE OF SOLVENCY INCREASE IN LIQUIDITY OF CAPITAL

5. THEORIES OF MONEY QUANTITY THEORY OF MONEY 1. Fisher ‘EQUATION OR TRANSACTION EQUATION 2. CASH BALANCE OR CAMBRIDGE EQUATION

6. FISHER EQUATION ASSUMPTIONS CONSTANT VALUE OF V AND V’ FULL EMP. CONSTANT TRADE TRANSATION LONG PERIOD PRICE LEVEL IS PASSIVE FACTOR M IS ACTIVE FACTOR

7. FISHER EQUATION Purchasing power of money - 1911 QM AND PRICE OF GOOD- DIRECT RELATION QM AND VALUE OF MONEY - INDIRECT DM=SM M’= CREDIT MONEY PT=MV+M’V’ P=MV+M’V’ T

8. M=F(P)