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Economics (AS & A Level) · Oct / Nov 2022 · Paper 31 · Question 23

9708Money and banking

What is the definition of liquidity?

  1. Athe ability of the foreign exchange market to buy foreign currency
  2. Bthe support a central bank provides for commercial banks
  3. Cthe ease with which an asset can be converted into cash
  4. Dthe reaction of governments to a global financial crisis

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Correct answer: C. the ease with which an asset can be converted into cash

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