Is the word that an adjective or a pronoun?

The word "that" can be both an adjective and a pronoun, depending on its function in a sentence.

As an adjective:

* "That book is interesting." ("That" modifies the noun "book")

As a pronoun:

* "That is my favorite color." ("That" replaces a previously mentioned noun)

* "I like that." ("That" refers to a previously mentioned idea or object)

To determine if "that" is an adjective or pronoun, look at its function in the sentence. Does it modify a noun (adjective)? Or does it stand in for a noun (pronoun)?