The liquidity of an asset indicates:
a. its buying power
b. the ease with which it can be converted into cash without a significant loss of value.
c. the ease with which it can be converted into another asset.
d. how likely people are to trade it internationally.
e. its intrinsic value.
b
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The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. B) the shift in the demand curve due to a change in purchasing power brought about by the price change. C) the movement along the demand curve due to a change in purchasing power brought about by the price change. D) the shift of a demand curve when the price of a substitute good changes.
In an expansion,
a. federal budget deficits tend to rise b. federal budget deficits tend to fall c. the federal debt tends to rise faster than in a recession d. federal government tax receipts tend to fall e. there is pressure on the Fed to monetize the debt