Consider the following liquid assets: 1. Demand deposits with the banks 2. Time deposits with the banks 3. Savings deposits with the banks 4. Currency The correct sequence of these decreasing order of Liquidity is

QUESTION

Medium

Economy

Prelims 2013

Consider the following liquid assets:

The correct sequence of these decreasing order of Liquidity is

Select an option to attempt

Explanation

Most liquid assets are the currency assets since they can be used anytime.

The least liquid assets are the time deposits, which are the deposits for a fixed time period and can only be used upon their maturity.

Demand deposits are more liquid than saving deposits because they can be demanded by the holder from the bank at any time.

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