Liquidity indicates how easily an asset can be exchanged for goods and services.

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Liquidity refers to the ease with which an asset can be converted into cash or used to purchase goods and services. It is a measure of how quickly and easily an asset can be bought or sold in the market without affecting its price. As such, it is a key attribute of most investments, as those with high liquidity are generally more popular and easier to trade than those with low liquidity.

Liquidity Indicates How Easily an Asset Can Be Exchanged for Goods