Liquidity is the
A) ease with which an asset can be converted into money.
B) inverse of the velocity of money.
C) speed with which the price of an asset changes as its intrinsic value changes.
D) same as the velocity of money.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which an asset can be converted into money. It is an important characteristic of an asset, as it affects how easily it can be bought and sold in the market. Higher liquidity means that an asset can be easily sold, whereas lower liquidity means that it may take longer to find a buyer or seller, or that the transaction may occur at a different price than expected.

Liquidity Is the