Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
Question
Chapter 13, Problem 1CQ
To determine

Illiquid assets and rank them from most liquid to illiquid.

Expert Solution & Answer
Check Mark

Explanation of Solution

The liquidity of an asset refers to its ease and quickness in converting itself into cash without any significant loss in value. Cash in hand, cash at bank, short-term investments, high grade bonds, and stocks are some of the examples of liquid assets.

 On the other hand, illiquid assets cannot be converted easily and quickly into cash without any loss in the value. Assets such as land, houses, a family-owned business, business equipment, and artistic works are some of the examples of illiquid assts. 

Economics Concept Introduction

Liquid asset: A liquid asset refers to the asset that can be converted easily and quickly into cash without any significant loss of value. 

Illiquid asset: An illiquid asset refers to the asset that cannot be converted easily and quickly into cash without any loss of value.

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