BharatNotes Liquidity
noun (mass/uncountable)Usage in a UPSC answer
When designing a counter-cyclical fiscal response, the state must balance the immediate injection of liquidity into credit-starved sectors against the medium-term risk that cheap money fuels asset-price inflation rather than productive investment.
Synonyms
Antonyms
Word Family
liquid (adj/n), liquidate (v), liquidation (n), liquidity (n), liquid (adv usage)
Root
Latin liquēre = to be fluid → liquidus = fluid, liquid; Late Latin liquiditas; financial sense 1818
Etymology
From Late Latin liquiditas, from Latin liquidus (fluid, liquid), from liquere (to be fluid); the financial sense of "capable of being converted to cash" dates from 1818.
Memory Hook
Think "liquid" — just as a liquid flows freely and takes any shape, a liquid asset flows readily into cash; the more "liquid" it is, the faster it pours into your hands as money.
Seen in UPSC Question Papers
- Prelims 2024 — Banking & Monetary Policy
- Prelims 2024 — Financial Markets
- Prelims 2016 — Banking
- Prelims 2015 — Banking
- Prelims 2013 — Banking & Monetary Policy
Real UPSC previous-year questions whose text uses “Liquidity” — proof this word earns its place on your list.
Tip: press Alt+S to hear pronunciation
