Official Answer Key & Detailed Solution
Ready to check the official UPSC Answer Key?
Click any option above to test yourself under exam conditions, or reveal the explanation directly.
Correct Answer: Option (D) — 4–1–3–2
Concept & Option Breakdown
Standard Reference VerifiedLiquidity refers to how quickly and easily an asset can be converted into spending medium without a loss of value:
- Currency (4) is physical cash and immediately liquid.
- Demand deposits (1) in current accounts can be withdrawn anytime on demand without restrictions.
- Savings deposits (3) are payable on demand but have certain operational/withdrawal caps.
- Time deposits (2) are locked for a fixed tenure and incur penalties upon premature withdrawal, making them the least liquid among the four.
Thus, the decreasing order of liquidity is 4–1–3–2.
Practice Full-Length & Sectional Prelims Mocks on this Interface
50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.