Money - Functions

medium of exchange - used as an exchange for goods and services
unit of account - used as a reference point to measure the market value of goods, services, and other transactions
storage of value - the ability to retain purchasing power into the future
standard of deferred payment - an accepted way to value a debt, thereby allowing goods and services to be acquired now and paid for in the future

Money - Types

Commodity Money	Whenever a commodity is used for exchange, the commodity becomes equal to money and is called commodity money. It is the simplest type of money used in a barter system where valuable resources perform the functions of money
Representative Money	is usually a paper form currency meaning it is backed by a commodity, such as gold or silver, in a bank or storage facility
Fiat Money	The value of fiat money is derived from a government order. Fiat currency is a type of money that has no intrinsic value and cannot be converted into a valuable resource. The value of fiat money is determined by government orders which makes it a legal instrument for all transaction purposes. Fiat money is the basis of all modern money systems
Fiduciary Money	The value of money depends on the belief that it will be generally accepted as a medium of exchange. Whenever a bank gives an assurance to the customers to pay various types of money, and the customer sells the promise or transfers it to someone else, it is called fiduciary money. Payment of fiduciary money is usually made in gold, silver, or paper currency
Commercial Bank Money	Commercial bank money is described as claims against financial institutions that can be used to purchase goods or services. It represents that part of a currency that is made up of loans generated by commercial banks. Commercial bank money mainly consists of deposit balances that can be transferred either through paper orders or electronically