Question

What do u mean by liquidity of currency? Give answer with respect to economics chapter money and credit. class 10

Answer 1

Definition: Liquidity means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it.

Description: Liquidity might be your emergency savings account or the cash lying with you that you can access in case of any unforeseen happening or any financial setback. Liquidity also plays an important role as it allows you to seize opportunities.

If you have cash and easy access to fund and a great deal comes along, then it's easier for you to cease that opportunity. Cash, savings account, checkable account are liquid assets because they can be easily converted into cash as and when required.

Answer 2

liquidity of currency means desire to hold cash money. there are three motives desire to hold cash money or preference to cash money :-


# transaction motive

# precautionary motive

# speculative motive