Liquidity is a measure of:
A) the monetary base.
B) how many coins are in circulation.
C) how quickly coins can be melted down.
D) how quickly an asset can be converted to currency.
E) the amount of reserves.

Question

Quizplus · Accepted Answer

Liquidity refers to how quickly an asset can be converted into cash or currency. Therefore, option D is the correct answer. The other options (A, B, C, and E) are not correct because they do not reflect the meaning of liquidity.

Liquidity Is a Measure Of