Liquidity
What Liquidity means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Liquidity
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Reference: Pearson Edexcel
The ability of investors to easily convert their equities back into cash by selling them to other investors in the secondary market.
Having enough cash to pay day-to-day liabilities, the lack of which creates the risk of insolvency.
Topics that use Liquidity
- Business survival and cash flow (Pearson Edexcel A-Level)
- The role of the financial sector (Pearson Edexcel A-Level)
Related terms
- Business survival
- Capital allocation
- Cash flow
- Cash-flow forecast
- Credit rating agencies
- Credit requirements
- Financial intermediation
- Insolvency
Using Liquidity in the exam
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