According to Dr. Kent, money is defined as “Anything which is commonly used and generally accepted as a medium of exchange or as a standard of value. ”

Contingent functions of money : 

(i) Assisting Production Decisions : The main objective of a producer or manufacturer is to maximize his sales revenue or profit. Therefore, he wants to employ such an amount of factors of production (labour, capital and other materials) which help in achieving the goals of profit maximisation while employing any factor, the firm has to make payments to pay wages to the workers, interest to the owners of capital, etc. All such factor payments are made in terms of money. Therefore, money prices of these factors help a firm in taking important production decisions.

(ii) Assisting Consumption Decisions : The main objective of. a consumer is to maximize his utility through consumption of various goods. But the consumption of goods depends on the money-income of the consumer as well as the money-prices of the commodities to be consumed. The consumer has to pay a price for purchasing commodities for consumption. The money-income of the consumer and the moneyprices of these commodities to be consumed also influence the consumption decisions of consumers.

(iii) Assisting Distribution of National Income : The owners of various factors of production sell their factors at market prices. Therefore, the owners of labour-power earn money wages, owners of capital earn interest, owners of land earn rent and owners of an organisation earn profits. All these factor-incomes collectively constitute national income Therefore, the distribution of national income among the owners of different factors is also determined by the money prices of such factors.