Whether an asset is “liquid” often depends on what situation you are in. For each of the following pairs of assets, which is more liquid in the particular setting?
You want to buy a sofa:
A savings account or currency
You want to trade for a bologna sandwich in elementary school:
A peanut butter and jelly sandwich or sushi
You want to buy a house:
Currency or a checking account You live in a postapocalyptic wasteland: Rice or currency
You are a traveling across Europe during the Middle Ages:
Gold coins or works of art
You are an investment banker buying a corporation:
U.S. Treasury bonds or currency