Which of the following is NOT a demand component?

The concept of demand components in economics typically includes various factors that influence the overall demand for goods and services in an economy. Consumption, investment spending, and net exports are all direct components of aggregate demand.

Consumption refers to the total spending by consumers on goods and services, reflecting the level of consumer confidence and economic health. Investment spending involves expenditures on capital goods that will be used for future production, indicating business confidence and future growth prospects. Net exports, which represent the difference between a country's exports and imports, also play a crucial role in determining overall demand, as they indicate how much a country is selling or purchasing from other nations.

In contrast, liquidity refers to the ease with which an asset can be converted into cash without affecting its market price. While liquidity may affect the capacity to consume or invest, it is not a direct component of demand itself. Therefore, liquidity does not measure or create demand; instead, it supports economic activity by facilitating transactions and financing. This distinction clarifies why liquidity is not considered a demand component like the others listed.