Liquidity can be defined as the
A)cash value of money.
B)value of money adjusted for inflation.
C)value of fiat money when used for spending.
D)ease with which an asset can be converted to a spendable asset.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which an asset can be converted to a spendable asset, such as cash. Therefore, the best choice is D. Option A refers to the cash value of money, but not specifically its convertibility. Option B refers to the value of money adjusted for inflation, which is not directly related to liquidity. Option C refers to the value of fiat money when used for spending, but does not take into account the asset's convertibility.

Liquidity Can Be Defined as the