UPSC CSE Prelims
Question 55
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
View correct answer and explanation
Correct answer: D
Correct Option: D
Explanation: Currency is immediately spendable, followed by demand deposits, savings deposits and then less-accessible fixed/time deposits.
Option-wise Analysis:
A: Incorrect - Wrong: it ranks demand deposits ahead of physical cash.
B: Incorrect - Wrong: it places savings and time deposits ahead of demand deposits.
C: Incorrect - Wrong: it treats time deposits as the most liquid and cash as the least liquid.
D: Correct - Correct: 4 (currency) → 1 (demand) → 3 (savings) → 2 (time deposits).