Liquidity refers to
A)the ease with which an asset is converted to the medium of exchange.
B)the measurement of the intrinsic value of commodity money.
C)the measurment of the durability of a good.
D)how many time a dollar circulates in a given year.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which an asset can be converted into cash or the medium of exchange. A highly liquid asset is one that can be quickly bought or sold without significantly affecting its price. Examples of highly liquid assets include cash, stocks, and bonds. The concept of liquidity is important in financial markets, as investors prefer to hold assets that are easily converted into cash without any loss of value.

Liquidity Refers to