Liquidity is the
A) ease with which an asset can be converted into a means of payment with little loss of value.
B) degree to which an asset acts as money without a loss of value.
C) ease with which credit cards are accepted as a means of payment.
D) degree to which money can be converted into an asset with little loss of value.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which an asset can be converted into a means of payment with little loss of value. Choice B refers to the concept of "moneyness," which is related but not the same as liquidity. Choice C refers to the acceptance of credit cards, which is not necessarily related to liquidity. Choice D is the opposite of liquidity, as it refers to the ease with which money can be converted into an asset without losing value.

Liquidity Is the