The best statement that defines the liquidity of money is how available money is to spend. Thus, Option D is the correct statement.
What do you mean by liquidity?
Liquidity means that an asset, or collateral, can be easily converted into cash without having to compromise its market value.
Cash is the most liquid of goods, while the material is the least liquid. The two main types of liquidity include market liquidity and accounting liquidity.
Therefore, liquidity of money means how available money is to spend. Option D is the correct statement.
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