UPSC Prelims 2013 – Question 24

Q: Consider the following liquid assets:

• Demand deposits with the banks
• Time deposits with the banks
• Savings deposits with the banks
• Currency

The correct sequence of these assets in the decreasing order of liquidity is

a) 1–4–3–2
b) 4–3–2–1
c) 2–3–1–4
d) 4–1–3–2

Correct Answer: Option (d)

• Liquidity of currency is highest. Next will come demand liabilities, as they have to be cleared when demanded. Next savings and least liquidity will be of time deposits. Hence, option (d) is correct.

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