When I'm dealing with folk revivals for academic study, because I'm looking at revivals, I define folk music as what they chose to perform in folk clubs at a given time (leaving tradition - another vexed term - to define anything with a clear continuity to past non-revival players). But these are merely definitions of convenience - and I've always had to state them as such.

In the real world, outside these definitions, folk can be as broad or as narrow as you like. Almost everyone ("the folk"?) can sing a version of "Yesterday" or "Angels" ... are they folk songs? Or are only the popular songs that have lasted a century or so qualified? Then comparatively few people know even the more famous "folk" songs like "Mattie Groves" or "Hughie the Graeme" - so are they folk or traditional or are they now appropriated and adopted into art songs, even though they originated among "the folk"? Oh, these threads just tie you up in knots, and I'm feeling particularly knotted by now.