Liquidity refers to the
A)rapidity with which money flows through the economy.
B)ease with which an asset can be converted into cash.
C)ease with which banks move funds from checking to savings accounts.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which an asset can be converted into cash. This means that if an individual needs cash quickly, they can easily sell their asset without losing its value. Option A is referring to the velocity of money, which is a separate concept. Option C is referring to the ease of transferring funds between accounts, which is also a separate concept. Therefore, option B is the best choice.

Liquidity Refers to the