Arrange the following conditions from most to least liquid form:

(A) Currency + Demand Deposit+Savings deposits with Post Office savings banks.

(B) Currency + Demand Deposit + Net time deposits of commercial banks+ Total deposits with Post Office savings organisations.

(C) Currency + Demand Deposit.

(D) Currency + Demand Deposit + Net time deposits of commercial banks.

Choose the correct answer from the options given below:

Option 1 -> This arrangement starts with (A) which is not the most liquid form.

Option 2 -> Correctly arranges from most liquid (C) with only currency and demand deposits, to least liquid (B) with multiple deposit types.

Option 3 -> Incorrectly places (B) as most liquid when it contains the most components and is actually least liquid.

Option 4 -> Incorrectly places (C) first but then (B) second, which is wrong as (B) should be last.

Hence, Option 2: (C), (A), (D), (B) -> Liquidity decreases as more types of deposits are added. (C) contains only currency and demand deposits - the most liquid forms. (A) adds savings deposits with post office, making it less liquid. (D) adds net time deposits of commercial banks, further reducing liquidity. (B) contains the most components including both time deposits and all post office deposits, making it the least liquid. This follows the principle that the more restrictions and conditions on withdrawal, the less liquid the monetary aggregate. -> correct