1. Definitions of Money
There is no commonly acceptable definition of money
Some define money as anything acceptable I payment of goods and services or in settlement of debt.
Some say money is anything that performs the function of medium of exchange, measure of value and store of value .
Johnson has given four approaches to define the concept of money :

2. Approaches of money Approaches Conventional Approach
Gurley and Shaw Approach
Central Banking or Redcliffe Approach
Chicago Approach

3. 1. Conventional Approach
In this approach money is defined on the basis of its functions. “ Money is what money does.”
In words of R P Kent, “ Money is anything that is commonly used and generally accepted as a medium of exchange or as a standard of value.”
Geoffry Crowther says, “ Money can be defined as anything that is generally acceptable as a mean of exchange and at the same time acts as a measure and store of value.”
Gist of this definition: Money= Notes +coins + Demand Deposits

4. 2. Chicago Approach
Given by Nobel Laureate Friedman. He says, “ Money is temporary abode of purchasing power.”
In monetary economy, every transaction has two aspects: sale and purchase. It is essential to hold purchasing power in terms of money till such time the transaction is performed.
So Money= Currency+ Demand Deposit+ Time Deposit
This definition widened the scope of concept of money

5. 3. Gurley and Shaw Approach
This approach says money should include all instruments which are close substitute of each other.
So Money= Currency+ DD +TD +Savng Bank Deposit +Shares +Bonds +……..
Credit instruments issued by financial intermediaries –banking and no-banking and thrift societies like LIC, Saving Bank etc have high quality of liquidity. So these should be also included in money.

6. 4. Central Banking or Redcliffe Approach
This approach also includes credit in the definition of money. So credit extended by NBFI including unorganized institutions is also included in definition of money.
Money= Currency+ DD+ TD+ Saving Deposit+ Shares+ Bonds+ Securities+ Credit from unorganized sector

7. Characteristics of Money
General acceptability
Voluntary Acceptability
Medium of Exchange
Money is a mean not an end
Government control
Liquid Asset
Money is not a veil

8. Functions of Money Functions of Money Primary Functions
Secondary Functions
Static and Dynamic function
Contingent Functions

9. Standard of Deferred Payments
Functions of money
Primary Functions
Secondary Functions
Medium of Exchange
Measure of Value
Standard of Deferred Payments
Store of Value
Transfer of value

10. Functions of Money Basis of Credit Creation Maximum Satisfaction
Contingent Functions
Static and Dynamic Functions
Basis of Credit Creation
Maximum Satisfaction
Distribution of National Income
Bearer of option
Guarantee of Solvency
Increase in the liquidity of capital
Static Functions
Dynamic functions

11. Importance of Money In consumption In production In exchange In trade
Direct importance in the field of Economics
Indirect importance in the field of Economics
In consumption
In production
In exchange
In trade
In distribution
In public finance
Capital formation
Freedom from barter
Solution of Central Economic problems
Basis of Credit
Index of Economic Development
Increase in mobility of capital
Measure of social welfare
National and international unity

12. Disadvantages of Money
Economic Evils
Social Evils
Instability of value
Trade cycles
Over- Capitalization
Economic wastage
Unequal distribution of wealth
Problem of black money
Encourages materialism
Tendency of Exploitation
Increase in immoral tendencies