Liquidity is defined as
A)the ease with which a given asset can be converted to a store of value.
B)the ease with which a given asset can be converted to a unit of account.
C)the ease with which a given asset can be converted to a medium of exchange.
D)the ease with which a given asset can be converted to a standard of deferred payment.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which a given asset can be converted to a medium of exchange. In other words, it is the ability of an asset to be quickly and easily converted to cash or another asset that can be used to make purchases. Choices A, B, and D are not accurate definitions of liquidity.

Liquidity Is Defined as