Money is medium of exchange, store of value, unit of account, and standard of deferred payment. Medium of exchange: Accepted in transactions (primary function), eliminates barter problems (double coincidence of wants). Store of value: Can be held and used later (less perfect than bonds/gold—loses value to inflation). Unit of account: Standard measure of value (prices quoted in money). Standard of deferred payment: Basis for credit transactions (loans repaid in money). Evolution: Commodity money (gold, silver—intrinsic value), Representative money (notes backed by commodity), Fiat money (current system, no intrinsic backing, value from government decree and acceptance). Functions: Purchasing power (buy goods), Wealth storage, Transaction facilitator, Price determination. Monetary aggregates: M0 (currency in circulation), M1 (M0 + demand deposits), M2 (M1 + savings accounts), M3 (M2 + time deposits)—broader measures include more liquid assets. Indian context: Rupee is fiat currency; RBI controls money supply. ICAI focus: Functions, types, monetary aggregates. Exam tip: Money's value depends on acceptance and scarcity; inflation erodes value; distinguish money from wealth (more than money).