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Liquid Asset
An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value.
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Liquidity Trap
Liquidity trap is a situation when expansionary monetary policy does not increase the interest rate, income and hence does not stimulate economic growth.
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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.
How does Liquidity work? Watch video...
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- PREV DEFINITION
Liquid Asset
An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value.
Read More
- NEXT DEFINITION
Liquidity Trap
Liquidity trap is a situation when expansionary monetary policy does not increase the interest rate, income and hence does not stimulate economic growth.
Read More
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